Published June 25, 2026
Nobody Expected This Housing Market in 2026: Twin Cities & National Housing Market Update
If you'd rather watch this market update than read it, you can watch my full video here:
https://youtu.be/NeNcUIdb5Vk
In the video, I break down what's happening in both the national housing market and the Twin Cities housing market, explain one of the biggest surprises we're seeing right now, and discuss what buyers and sellers should be paying attention to over the next 6 to 12 months.
The reality is somewhere in between.
The housing market is adjusting to a new normal. Mortgage rates remain elevated compared to the ultra-low rates many homeowners enjoyed during the pandemic years, affordability remains challenging, and buyers are becoming more selective. At the same time, home prices have remained surprisingly resilient in many markets, including much of the Twin Cities metro area.
One of the biggest reasons is inventory.
That seemed logical.
As mortgage rates rise, monthly payments increase. Higher payments generally reduce buyer demand. Reduced demand should put downward pressure on home prices.
But that's not exactly what happened.
While buyer demand cooled somewhat, inventory never surged.
Millions of homeowners locked in mortgage rates between 2% and 4% during the pandemic. Many of those homeowners have little motivation to sell and replace those low rates with mortgages in the 6% to 7% range.
As a result, inventory remains limited in many parts of the country, including Minnesota.
When supply stays low, home values tend to remain supported.
National housing data often makes broad generalizations, but real estate is local.
The Twin Cities market is behaving differently than many people expect.
Current market indicators show:
In fact, many areas of the Twin Cities are still operating in conditions that favor sellers.
There are multiple markets operating simultaneously.
Inventory levels are extremely low, and buyer demand remains healthy. Homes that are priced correctly and marketed effectively continue to attract strong interest and competitive offers.
If you're selling in this price range, preparation and marketing remain incredibly important, but demand is still there.
Homes priced above $1 million are generally taking longer to sell and have significantly more inventory available.
Luxury buyers tend to be more sensitive to:
A few years ago, buyers often felt pressured to make immediate decisions.
Today's buyers have more time.
They're comparing neighborhoods, evaluating monthly payments, reviewing property taxes, and negotiating repairs more frequently than they were during the peak frenzy of the market.
While this creates a more competitive environment for sellers, it's also helping buyers make more informed decisions.
Today's sellers need a strategy.
The homes that consistently outperform the market typically have several things in common:
That's one reason we created our Strategic Seller Blueprint.
The guide walks sellers through the exact process we use to maximize exposure, attract buyers, and position homes for the strongest possible outcome.
Download your free copy here:
https://www.paulinghomes.com/strategic-seller-blueprint
If inventory stays low, home prices will likely remain relatively stable.
Consumer confidence often has a major impact on housing activity.
Limited inventory continues to support home values, buyer activity remains healthy in many price ranges, and well-prepared homes are still attracting strong interest.
That's why it's so important to focus on local market conditions rather than relying solely on national headlines.
If you're thinking about buying or selling in Eden Prairie, Minnetonka, Chanhassen, Plymouth, Wayzata, Edina, Bloomington, Excelsior, or anywhere in the Twin Cities metro area, I'd be happy to help.
And if you'd like a deeper dive into today's market, don't forget to watch the full video here:
https://youtu.be/NeNcUIdb5Vk
https://youtu.be/NeNcUIdb5Vk
In the video, I break down what's happening in both the national housing market and the Twin Cities housing market, explain one of the biggest surprises we're seeing right now, and discuss what buyers and sellers should be paying attention to over the next 6 to 12 months.
The Housing Market Isn't Crashing... But It's Not Booming Either
Depending on which headlines you read, you might think the housing market is either on the verge of collapse or about to explode higher.The reality is somewhere in between.
The housing market is adjusting to a new normal. Mortgage rates remain elevated compared to the ultra-low rates many homeowners enjoyed during the pandemic years, affordability remains challenging, and buyers are becoming more selective. At the same time, home prices have remained surprisingly resilient in many markets, including much of the Twin Cities metro area.
One of the biggest reasons is inventory.
Why Home Prices Haven't Fallen Like Many Predicted
A few years ago, many experts predicted that higher mortgage rates would cause significant home price declines.That seemed logical.
As mortgage rates rise, monthly payments increase. Higher payments generally reduce buyer demand. Reduced demand should put downward pressure on home prices.
But that's not exactly what happened.
While buyer demand cooled somewhat, inventory never surged.
Millions of homeowners locked in mortgage rates between 2% and 4% during the pandemic. Many of those homeowners have little motivation to sell and replace those low rates with mortgages in the 6% to 7% range.
As a result, inventory remains limited in many parts of the country, including Minnesota.
When supply stays low, home values tend to remain supported.
The Twin Cities Market Is Stronger Than Many People Realize
This is where things get interesting.National housing data often makes broad generalizations, but real estate is local.
The Twin Cities market is behaving differently than many people expect.
Current market indicators show:
- Approximately 2.6 months of housing inventory
- A pending ratio of roughly 68%
- Average sold homes going under contract in about 43 days
- Sellers receiving approximately 98.4% of their final list price
In fact, many areas of the Twin Cities are still operating in conditions that favor sellers.
Not All Price Ranges Are Performing the Same
One of the most important things buyers and sellers need to understand is that there isn't just one housing market.There are multiple markets operating simultaneously.
The $500,000 to $1 Million Market
This remains one of the strongest segments in the Twin Cities.Inventory levels are extremely low, and buyer demand remains healthy. Homes that are priced correctly and marketed effectively continue to attract strong interest and competitive offers.
If you're selling in this price range, preparation and marketing remain incredibly important, but demand is still there.
The Luxury Market
The luxury market tells a different story.Homes priced above $1 million are generally taking longer to sell and have significantly more inventory available.
Luxury buyers tend to be more sensitive to:
- Mortgage rates
- Stock market fluctuations
- Economic uncertainty
- Employment trends
Buyers Are Becoming More Strategic
Another trend we're seeing is buyers becoming more analytical.A few years ago, buyers often felt pressured to make immediate decisions.
Today's buyers have more time.
They're comparing neighborhoods, evaluating monthly payments, reviewing property taxes, and negotiating repairs more frequently than they were during the peak frenzy of the market.
While this creates a more competitive environment for sellers, it's also helping buyers make more informed decisions.
What Sellers Need to Know
The days of simply putting a home on the market and expecting multiple offers immediately are largely behind us.Today's sellers need a strategy.
The homes that consistently outperform the market typically have several things in common:
- Professional photography
- Strong video marketing
- Strategic pricing
- Proper preparation before listing
- Effective online exposure
That's one reason we created our Strategic Seller Blueprint.
The guide walks sellers through the exact process we use to maximize exposure, attract buyers, and position homes for the strongest possible outcome.
Download your free copy here:
https://www.paulinghomes.com/
What I'm Watching Over the Next 6 to 12 Months
No one has a crystal ball, but there are three factors I'll be watching closely.1. Mortgage Rates
Even a modest decline in mortgage rates could bring additional buyers into the market and increase competition.2. Inventory Levels
Inventory remains one of the most important factors supporting home values today.If inventory stays low, home prices will likely remain relatively stable.
3. Consumer Confidence
When people feel secure in their jobs and financial future, they buy homes.Consumer confidence often has a major impact on housing activity.
Final Thoughts
Perhaps the biggest surprise of 2026 so far is that despite mortgage rates remaining elevated, much of the Twin Cities housing market continues to show remarkable strength.Limited inventory continues to support home values, buyer activity remains healthy in many price ranges, and well-prepared homes are still attracting strong interest.
That's why it's so important to focus on local market conditions rather than relying solely on national headlines.
If you're thinking about buying or selling in Eden Prairie, Minnetonka, Chanhassen, Plymouth, Wayzata, Edina, Bloomington, Excelsior, or anywhere in the Twin Cities metro area, I'd be happy to help.
And if you'd like a deeper dive into today's market, don't forget to watch the full video here:
https://youtu.be/NeNcUIdb5Vk