Real-Time Real Estate Market Intelligence

As of February 1, 2026, the Twin Cities real estate market is transitioning into a phase of "gentle normalization." After years of hyper-competitive bidding and rapid appreciation, the market is stabilizing with moderate price growth, slightly better inventory levels, and a more balanced dynamic between buyers and sellers.

1. Current Median Home Prices and Year-Over-Year Trends

The Twin Cities market shows a distinct contrast between the two core cities, though both remain relatively affordable compared to national averages.

• Minneapolis: The average home value sits at approximately $316,531, reflecting a modest 1.5% to 4.6% increase year-over-year depending on the neighborhood. While prices in core urban areas have seen slight cooling or flat growth, suburban-style homes within city limits continue to hold value well.
• St. Paul: St. Paul continues to be the more affordable of the two cities, with a median sale price of approximately $296,000 to $301,500. This represents a relatively flat trend (-0.05% to +1.1% YoY), indicating a high degree of price stability.
• Metro-Wide: Across the broader 7-county metro area, the median sales price is roughly $390,000, up about 2.6% from the previous year.

2. Housing Inventory Levels (Months of Supply)

Inventory is slowly recovering from historic lows, though it remains tight enough to favor sellers in high-demand price brackets.

• Months of Supply: The Twin Cities metro currently holds about 3.1 months of supply. While this is an improvement from the sub-2-month levels seen in 2023-2024, it is still below the 5–6 months typically required for a fully "balanced" market.
• Minneapolis Specifics: Minneapolis is currently operating in "neutral territory" with approximately 1.8 months of supply.
• Days on Market: Homes are spending an average of 31 to 50 days on the market. This is a significant increase from the "sold in a weekend" era, giving buyers more breathing room to conduct inspections and appraisals.

3. Current Mortgage Interest Rate Trends (30-Year Fixed)

As of early February 2026, mortgage rates have moved away from their 2024 peaks but remain significantly higher than the pandemic-era lows.

• Current Rate: The average 30-year fixed mortgage rate in Minnesota is approximately 6.00% to 6.18%.
• Trend: Rates have decreased by roughly 73 basis points compared to this time last year.
• Outlook: Experts forecast rates to remain in the low 6% range throughout 2026. This "new normal" has led to a return of buyers who were previously sidelined by 7-8% rates, though the "lock-in effect" (homeowners unwilling to trade 3% rates for 6%) continues to limit the number of existing homes hitting the market.

4. Specific Advice for Buyers and Sellers

For Buyers

• Take Your Time: With homes sitting for 30-50 days, you no longer need to waive every contingency to win. Demand an inspection and use the findings to negotiate repairs or price credits.
• Look for "Stale" Listings: Homes that have been on the market for 45+ days are prime targets for aggressive offers. Sellers in this position are often more willing to contribute to closing costs or interest rate buy-downs.
• Inventory Sweet Spot: The most significant inventory growth is in the $350k - $550k range and new construction condos. Focus your search here for the most options.

For Sellers

• Pricing is Paramount: This is a "gentle" seller's market. If you overprice based on 2022 comps, your home will sit. Accurate pricing from Day 1 is essential to capturing the initial wave of buyer interest.
• Highlight Efficiency: 2026 buyers are prioritizing "Net-Zero Ready" features. If you have solar-ready roofs, EV charging, or smart-home automation, make sure these are front and center in your marketing.
• Move-In Ready Wins: With high interest rates, buyers have less cash for renovations. Homes that are freshly painted and require zero immediate repairs are fetching the highest premiums.

Rental Market Strength in St. Paul

The rental market in St. Paul remains exceptionally strong and serves as a major draw for investors. St. Paul’s vacancy rate has consistently stayed below 5%, currently hovering around 3.3% to 4%, which is tighter than the vacancy rate in Minneapolis.

The market has seen a recent boost in investor confidence following the 2025 amendment to the city’s rent control ordinance, which exempts newer properties (post-2004) from the 3% rent cap. With more than half of St. Paul households being renters, demand remains high in neighborhoods like West Seventh and Highland Park, where rent growth continues to outpace many other areas in the Midwest.