As we head deeper into 2026, the Minnesota housing market is entering a new chapter — one shaped by more balance and opportunity than buyers and sellers have seen in recent years. After a prolonged period of tight supply, high mortgage rates, and sluggish sales, experts now see a shift toward steadier conditions that could benefit both buyers and sellers alike this year. 

1. Mortgage Rates Are Moderating — Still High, But Helping

One of the biggest market drivers in 2026 will be mortgage rates. After years of elevated borrowing costs, rates have eased from the peaks seen in 2024–2025. The average 30-year fixed rate is expected to settle around the 6%–6.4% range, which is lower than most of last year and near the lowest point since 2022. 

📌 What this means locally:

• Slightly lower rates boost buyer confidence — especially for first-timers and move-up buyers.

• Even a small drop in rates can significantly increase buyer purchasing power in markets like the Twin Cities. 

2. Inventory Continues to Climb — More Choices for Buyers

After years of historically low inventory, 2026 looks like the year more homes hit the market. National forecasts show existing-home inventory climbing by nearly 9% — and while Minnesota’s trend varies by community, the broader shift toward more listings should be noticeable. 

📌 What to expect in Minnesota:

• More sellers who previously postponed moving due to high rates may return to the market.

• Inventory gains mean fewer bidding wars, even if competition remains strong in desirable neighborhoods.

3. Home Price Growth Is Slowing, But Modest Growth Continues

Both national reports and local data point toward moderate price growth in 2026 rather than dramatic jumps or sharp declines.

Nationally, home prices are forecast to grow modestly — 1-2%— with some markets even seeing small real (inflation-adjusted) declines. 

Minnesota’s own data shows healthy median prices and steady transaction activity, especially in the Twin Cities metro. While prices are rising more moderately than the double-digit years of the past decade, they remain stable and resilient. 

4. Sales Activity Is Expected to Pick Up

Experts are forecasting an uptick in home sales in 2026. The National Association of REALTORS® projects a double-digit increase in existing-home sales nationally, backed by more inventory and better affordability than recent years. 

Locally, while Minnesota markets aren’t necessarily seeing dramatic turnover, higher demand and improved financing conditions are helping homes move faster — especially well-priced, quality listings in the Twin Cities and emerging suburbs. 

5. Affordability Improves — But Challenges Remain

Affordability has been a challenge across the country, driven by years of rising prices and high borrowing costs. In 2026:

✔️ Monthly mortgage payments are projected to fall below 30% of median income on average — a hopeful sign for buyers. 

✔️ Rising wages and slower price growth are expected to ease the cost burden for many households. 

Bottom Line: Steadier & More Balanced

The Minnesota real estate market in 2026 looks more positive and more balanced than the tight seller-dominated years of the recent past. While prices aren’t dropping steeply and rates remain above pre-pandemic lows, incremental improvements in affordability, growing inventory, and renewed buyer activity are creating more opportunities for both buyers and sellers.

Whether you’re thinking of buying your first home, selling your property, or investing in Minnesota real estate this year, strategic planning and local market insights will be more valuable than ever.

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