First-time buyers often sidelined in 2025 Minnesota housing market
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With new listings rising 4.6 percent to a three-year high, the 2025 Minnesota housing market saw more active sellers. Meanwhile, first-time buyers were largely priced out, according to a new report from Minnesota Realtors, which represents realtors across the state.
The report found median home price rose 2.9 percent statewide to $355,000, with the Twin Cities seeing a 2.6 percent increase to $390,000. They’re both a new price record that’s followed a 14-year-long trend of climbing prices.
The surge has been driven in part by a supply-and-demand imbalance, with more high-end luxury homes coming on the market, while stagnant wages have left fewer buyers able to afford housing prices.
Those who can buy homes have been more selective in their choices, said Wendy Uzelac, president of the Minnesota Realtors.
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“They're not feeling as much pressure to purchase in a particular timeline that they maybe did in the last couple of years,” Uzelac said. “And because the inventory did rise slightly, they have more choices.”
Interest rates have also eased a bit, which has motivated some to purchase new properties. However, rates remain higher than they were a couple of years ago, making them unappealing to first-time buyers.
“They've just, in a lot of ways, been waiting for interest rates to come down just a little bit or steady out a little bit so they have that confidence in purchasing that first property,” Uzelac said.
Nationwide, about a fifth of all buyers were first-time buyers, according to a report from the National Association of Realtors. The average age of those first-time buyers was about 40, which is the highest it’s been in 45 years. Younger first-time buyers haven’t been able to accrue the stock wealth or equity that more experienced buyers have built over the years.
Still, Uzelac said she expects an increase in buyer activity in 2026.
“I believe that we're going to continue to see a little bit better inventory in the market, which will not only help the move-up buyers, it will also help first-time home buyers,” Uzelac said. “And the realtors, we're ready to go to work for our sellers and our buyers.”
