The Twin Cities Housing Market: A Tale of Three Homebuyers

Minnesota house hunters have faced short supply, higher interest rates, and no choice but to play the game

Illustration by Ellen Schofield

The story goes something like this: Minnesota winter went extra long in 2023, gouging roads and toying with previous records. Things thawed, and some who had hunkered cozily down could no longer ignore it: the hum of the housing market heating back up.

Warmer weather means many are ready to move. And homebuyers in the Twin Cities metro area were antsy. They wanted extra room for an extra kid. “There are toys everywhere.” Or they needed to settle on a new school district. “We have a kid going into high school in the fall.” Or they had first-home dreams, months away from late-summer wedlock. “We figured, to move in a month before the wedding date, that meant a closing date in July.” 

Interest rates have not inspired haste. Recently, they’ve doubled. Prices haven’t been dropping much, either, thanks to a low supply of homes for sale. But the drama of necessity—life events, impending timelines—keeps pieces in play.

That’s the big picture of busy season in the Twin Cities this year. “I think it really is, for the most part, about life change,” says Jerry Moscowitz, president of the Minneapolis Area Realtors association. People are moving because they have to, not because of low rates or low prices—not for investment opportunism. “There are things that have happened in your life, whether you’ve been relocated, or whether you have kids now and you didn’t have kids before, or whether where you’re working has changed.”

Only recently, we experienced a fever-dream era of homebuying. Analysis of 2020 census data found that the Minneapolis-St. Paul metro region had the worst housing shortage in the nation, with only 4.6% of housing units standing vacant. The pandemic plunged interest rates to record lows (2.65% on a 30-year fixed mortgage) in 2021. Houses in the Twin Cities sold twice as fast as the year prior. Prices hit record highs. Enraged-exhausted dinner-party tales regaled with ferocious bidding wars, waived inspections, and tens of thousands of dollars proffered above asking price—spurned, and spurned again. 

Since then, the market has budged in the direction of normalcy, but it still feels off-kilter. To paint with numbers: In April 2021, it would have taken just under a month (0.9) to sell through housing inventory in the Twin Cities’ seven-county metro region. That was a historic low, according to Minnesota Realtors, having dropped more than 50% from the year prior. For reference, it would take four to six months to sell through a “balanced” inventory, in which case “there’s no side that’s really favored … either the buyer or the seller,” Moscowitz says. 

Now, jump ahead to this past April: It would have taken over a month (1.5) to deplete inventory. So, the market was still imbalanced, and sellers’ spring prevailed, even as the battleground vibe seemed to clear slightly. “This [spring] is a level below what we experienced through the first half of [2022],” Moscowitz says, “and, really, all of 2021.” 

It has been a perhaps less-than-satisfying cooldown. New listings on the market dropped by almost 28%, compared to April 2022. Closed sales declined by more than 30%. The median price dropped by over 1% but still sat at the record-scraping height of $370,000, with sellers getting 100.2% of asking price, down 3.6% from the previous year.

A year ago, a house simply appearing on the market was enough to make it desirable. Today, houses should be priced accordingly if owners have put off maintenance or neglected updates, and those sellers should not expect a deluge of offers, Moscowitz says. Buyers are choosier. Interest rates and prices are upsetting.

And the focal point remains the low supply of homes. “The bottom line with everything that has happened in the last two or three years is that we don’t have enough homes available for sale,” he says. The last time the Twin Cities had a balanced market, with four to five months of inventory, would have been mid-2014, he adds.

Varied reasons for the shortage crop up: the mid-2000s mortgage crash that put homebuilders out of work, the phenomenon of empty nesters aging in place, the inflated value of work-from-home spaces, restrictive zoning laws, supply-chain issues. Some homeowners refinanced when interest rates dropped. With interest rates leaping toward 7%, those homeowners may have decided to cling to what they have, keeping their properties off the market. “I think that’s the biggest bottleneck,” says Rob Glynn, co-founder of a Twin Cities real estate agency. “It’s not buyers. It’s not people trying to get into owning real estate. It’s the people that already own it, not wanting to give it up.”

Elsewhere, a higher inventory of new builds has spurred demand for them. New builds, while more expensive, can be good in a crunch; they aren’t as likely to court multiple offers. But Moscowitz notes there’s not a lot of room to build in Minneapolis, St. Paul, and the first-ring suburbs. “Everybody’s trying to find the best way of creating more housing, and it’s a challenge,” he says. “In certain areas, there’s a limit to how much building you can do.”

Overall, how are buyers faring? If they were knowledgeable and diligent, they had fairly smooth going. If they put in seven futile offers, they learned some lessons and turned to stoicism. If they were staunch about needs and wants, they decided to hold out, overcrowded home be damned. 

To capture a multi-lens view of the season, we spoke to a few types of buyer. They were the First-Time Homebuyer, the Relocator, and the Move-Up Buyer. If their stories sound ordinary, that may be why they provide insights.

The First-Time Homebuyers

Definition: Folks buying their first home (obviously)
Names: Emma Rolfs, Justin Swetala
Ages: 22 (Rolfs), 27 (Swetala)
Occupations: Recent grad (Rolfs), mechanical engineer (Swetala)
Status: Closed on a house in Eagan in early June

On a gorgeous May afternoon, a seasoned home inspector leads a young couple through a house in Eagan, an adorable split-level that was built in 1975. They’re getting married soon-ish, in late summer, and they want to find their first home together before then. They’ve stomached seven rejected offers so far. It has been two months of “serious looking,” and it was impossible not to project their futures onto every house—thwarted versions of their lives scattered across the southwest metro. They have numbed themselves to heartache. But this could be it.

The two come across as gentle and even-natured. Rolfs is a gracious 22-year-old, a recent grad from the University of Northwestern who studied Christian ministry, who wants to be a children’s director at a church, and who rents a house with four friends. Swetala is a steady-eyed 27-year-old mechanical engineer who has been living with his parents for about two years to save up for a down payment. “You have to somehow make it disconnected. You can’t make it emotional,” Rolfs said the day before. “Because otherwise it’s just exhausting.” 

Emma Rolfs (right) and Justin Swetala
Emma Rolfs (right) and Justin Swetala


A place in Eagan sounded pretty ideal. It’s within a half-hour drive to Swetala’s work. They wanted a fireplace (got it), a deck or patio (got it, in the form of a four-season porch with a semi-wraparound deck), three bedrooms, to ensure room for a home office, a guest bedroom, and a future family (got it), and then “some indescribable feature that gives it, like, a personality and makes it feel more interesting,” Swetala says. Rolfs also wanted some degree of buffer. “I grew up in middle-of-nowhere, Iowa, so, permanently settling in the Cities, I wanted to make sure we had good privacy.”

But when they started looking, their expectations were off. Swetala had been looking for a year, not intensely, just perusing. His cousins bought a home at asking price. “So, my assumption was, when you see a house come on the market at asking price, you can pretty much get it for about asking price. Maybe a little more, a little less.”

They might go $5,000 over on their first offer, he thought. The home had just hit the market. Four hours after they submitted, they lost. “We’re like, ‘Are you kidding me? How did that happen? There wasn’t even a bidding thing?’” Whoever bought it gave the sellers $26,000 over asking, he says. They waived inspections and did a short close, “so it was probably a cash offer.”

Their realtor, Jose Ramirez, told them to look at homes under budget, to have room to bid. The two would have offers turned down where they went $30,000 and $40,000 over. At one point, Ramirez tapped an escalation clause, declaring the couple’s willingness to one-up competing offers. That fell through, too. 

First-time homebuyers are generally having the hardest time. Aside from a knowledge deficit, they don’t have first-home equity, and it’s a competitive price range with low stock.

A few moves have edged them toward viability. Before they started looking, a mortgage broker helped them get pre-approved by a lender for 120 days, for up to $415,000, and at a 6.5% rate. They based it on Swetala’s income, since Rolfs recently graduated. “I wanted to just do it all on my own, so I put a budget together for us,” Swetala says, “and basically the plan is for the majority—almost the entirety—of her income to go toward paying her loans off as quickly as possible.”

The Eagan house was listed at $390,000. They went $25,000 over. (“I never would have done that six weeks ago.”) When they got the call from their realtor—theirs is one of two offers on the table—they dropped their closing costs “a little bit,” from $6,000 to $3,000, and got accepted. It was a 10% down payment with a 6% rate. “I got some program through Fannie Mae where I do a three- to four-hour training session, basically, and take a quiz at the end, and so that got our rate down, and we’re also going to buy down the rate by, like, a quarter point,” Swetala says.

Not much else made their offer competitive. They did not waive inspection, after hearing a horror story about an unexpected $20,000 roof repair. The carpeting in the home isn’t in great shape. The wallpaper looks dated—a daintily flowered kitchen. The garage reeks of cigarettes. But after touring nearly 40 homes, and after deploying a “shotgun” approach to offer-making, and after learning from Ramirez about what to look for (checking for water damage, inspecting the gradient around the house to make sure there’s no drainage into the basement), they’re finally set for a summer wedding.

“I don’t know how we would have done this without Jose,” Swetala reflects. “There’s so much that goes into it, especially now that we’re in the closing stage—like, all the paperwork.”

On inspection day, they learn of the house’s practically countless quiet demands. Two appliances are over 15 years old, with accelerating failure rates. The chimney crown is deteriorating. The upstairs bathroom should have a fan to preclude “a Petri dish of mold and mildew” from developing. The list goes on and on. But this is a classic litany, typical of houses built in the 1970s and ’80s.

In the back of their minds, Rolfs and Swetala had also wanted that ineffable “mystery” element. Moseying to the back of the house, into the four-season porch—which has garish Kelly-green carpeting—there are enormous windows (with wood frames that should have an oil-based varnish, the inspector says, to protect against weathering) that overlook a small, marshy, glistening lake in the backyard. “It’s not, like, a boat lake,” Swetala says. “It’s a little tiny one. But it’s still an amazing view.”

The Relocators

Definition: Folks moving to Minnesota from out of state
Names: Adrienne Goodwin, Kim Wilson
Ages: 47 (Goodwin), 50 (Wilson)—plus their 14-year-old son and 18-year-old son (who goes to college in California)
Occupations: Residential designer (Goodwin), architecture firm owner (Wilson)
Status: Closed on a house in Eden Prairie in early May

“We had kind of an unfair advantage,” says Adrienne Goodwin, speaking via Zoom from Portland, Oregon. She stands next to her wife, Kim Wilson. It’s early May, and their search had a soft start about five months ago, before they got serious in February. Now, in two days, they will close (again, via Zoom) on a house in Minnesota. The two are moving for work, broadly speaking. They’re calm. Content. Not harried or shell-shocked. With backgrounds in architecture and residential design, they knew what they were looking for while trawling the real estate database Redfin and using an online system their Minnesota realtor, Katey Bean, provided, which filters homes by preference. It went smoothly. But it also took diligence.

“We did our homework, where you read every shred of information we could on the house,” Goodwin says. “We looked at homes online”—between 150 and 200 of them, with three or four toured in person. “We looked at all the pictures very carefully and scrutinized what we could, and then we asked our realtor questions, who did an initial walkthrough for us. We walked through, virtually, with her.”

Adrienne Goodwin (right), Kim Wilson
Adrienne Goodwin (right), Kim Wilson


They wanted a somewhat lateral move, and they got it. From their ’60s ranch-style home in Portland, which they bought about 20 years ago, they nabbed a—“I don’t even know what the style would be called,” Wilson says. But it’s roughly similar. “It’s not quite a split level. It’s more like a traditional two-story with basement, where all the common areas—kitchen, dining, living room—are on the first level, and then all the bedrooms are upstairs.” They’d never had that kind of separation, with the four bedrooms upstairs, and while they wanted some kind of rambler, this was a pleasant surprise.

Built in the 1960s, it checked all their boxes, too: in a cul de sac, in one of their preferred school districts (Eden Prairie, as their younger son readies to enter high school), with a big lawn (for their 7-year-old yellow lab)—and it’s just enough of a fixer-upper, with Wilson noting, “We try not to get wooed by finishes and stuff.” Room for creativity, for renovations, was a plus. They plan to totally redo the kitchen and bathrooms.

They also sweetened their offer. The asking price was $499,900. They paid $525,000 and put down a sizeable down payment, above the typical 10%. The 2,500-square-foot home boasts a two-car garage and two wood-burning fireplaces, on a lot that’s a little over half an acre. It was on the market for a day when they put in their offer, and that offer was accepted two days later. Bean recommended they do a pass-fail inspection, since the two are “pretty savvy” about houses, Goodwin says. In this scenario, a buyer agrees not to use the findings to renegotiate price. They didn’t notice cracks or unevenness in the foundation—no moisture intrusion, either—and would otherwise handle the imperfections. (Waiving inspection entirely is not unheard of in the Twin Cities’ low-supply market, another realtor says, usually when buyers have experience.) The two beat out some five other offers, Bean estimates.

Of course, the interest rate sits at about 6%, significantly higher than the rate of their house in Portland. “We’re trying not to think about [that],” Wilson says. At the same time, “I think we’ve gotten over the sticker shock of [interest rates],” Bean notes, referring to her clients. “It’s just not what we were used to for a chunk of time.” The two didn’t want to wait around, either. The move had to line up with their younger son starting high school. And you can always refinance, Goodwin says.

Overall, the process was fast and clean. The day they accepted an offer on their Portland home, they also made their Minnesota gambit. They credit their “very strong” offer, knowing the Minnesota market would move fast, plus communication between Bean and their Portland realtor, who vetted Minnesota realtors and set them up “because she knows us so well,” Wilson says.

As a type of homebuyer, the relocator “is just unique unto itself,” Moscowitz says. “This is a person that is having to be in [a new] area for work, usually.”

That was their case, too: Wilson’s firm had opened a small Minneapolis office during the pandemic thanks to the ease of remote collaboration. To place ownership presence in Minnesota and to further the company’s women-owned status—and because Goodwin has family in the Midwest and can maintain her Portland clients via remote work—they committed to the Twin Cities. (Another pull: Minnesota’s strong schools.)

The relocator’s slice of the market—schlepping for new gigs, returning to old ties, craving new weather patterns—has changed little, Moscowitz says, with a notable exception: About two years after the pandemic’s work-from-home effect cut tethers to cubicles, 2.4% of U.S. adults had taken advantage of remote work by relocating, according to Upwork. By then, just over 9% were planning remote-work moves. That made for a 3-point increase from 2020. (If you’re curious, and without drawing a line between cause and effect: The Census Bureau found Minnesota lost 19,400 residents to other states from mid-2021 to mid-2022, the largest dip in about three decades.)

There was a moment of uncertainty, since the two are considered self-employed, in providing financial backup while getting preapproved—but they have since cleared all hurdles. For others relocating, deep in Redfin or Zillow, who lack a practical way to see homes in person, Wilson says to keep perspective. Literally. “[With] the use of wide-angle lenses now in pictures,” she says, “pretty much every single space you go into in a house looks way bigger in the photo than it does when you go in.”

The Move-Up Buyers

Definition: Folks leaving their current home for something bigger
Name: Kevin Hill
Ages: 39—plus family: partner (38), two sons (8-year-old, 10-month-old), and a daughter (11)
Occupations: Social studies teacher whose partner works for a commercial real estate company
Status: Still looking

They weren’t necessarily planning on another kid. “It was a little unexpected.” But Kevin Hill shared bedrooms growing up, and he figured it wasn’t a huge deal—the 10-month-old is rooming with his 8-year-old brother because the five-person family has just three bedrooms, “and they love it.” It’s not a long-term situation, however. Hill and his wife have been in this Brooklyn Park tri-split for 14 years, and they have considered moving in the past. “It was never really a necessity.” But now? “There are toys everywhere.”

Hill is a mostly deadpan but essentially warm and laid-back person, a high school social studies teacher employed in the Anoka-Hennepin school district. The housing shortage means buyers have to act fast—especially if their requirements are as specific as Hill’s. The tricky part is that they don’t want to leave the school district.

And so, they have a “very, very narrow plot on a map” within which they’re willing to move. “We like being in a diverse community in Brooklyn Park, and both my wife and I value that our kids don’t live in a very sheltered, white, suburban area.” They already had to move the kids out of one district, when they enrolled them where Hill was working, out in Rockford. “We don’t want to do that to them, having to switch schools again, since they just experienced that.”

Kevin Hill and family
Kevin Hill and family


Long ago, the two landed in Brooklyn Park by accident. In their 20s, married for two years, seeking that first home, they found it for $230,000. Their realtor today told them he could probably sell it for $400,000. 

Hill recalls “thousands of more homes available” back then. “We could go in one weekend and look at 15 homes, and then the next weekend, we’d look at 15 more.” Today, given their narrow parameters, they don’t even average one house per month. It’s May, and two homes have popped up since last October. What style of house do they want? “We don’t care.”

One of those two homes was above their price range, which goes up to $440,000. The other was under. An hour after they looked at the latter, a realtor told them it had eight offers. They’d likely have to shell out another $40,000, so they didn’t bother. “If someone wants a home that badly, that they’re willing to spend $40 grand over asking price, that’s not something we want to get involved in,” Hill says, “just because it’s irrational, but also we don’t have the finances to outbid people.”

He knows the market was more intense two years ago. Today, it’s still largely about supply. “The same core problem affects [the move-up buyer],” says Hill’s realtor, Nate Pentz. “But it affects them differently. … For move-up buyers, because they typically have a specific home and a specific area that they want to be in, the amount of homes that come up for them to see is a lot less.” Seeing one home a month is actually not unusual.

Financially, the biggest issue is the interest rate, Hill says. They’re sitting on 2.5%. “I go back and forth [about buying a new house] all of the time.” It hurts to more than double it, so—dive into more projects? Continue tinkering at home? There’s no getting around the family’s core problem. The solution is crossed fingers and hopes for refinancing.

No bidding wars, though. And they would never waive inspection. “You get into the home and find out there’s, like, a $40,000 repair.” Perfection doesn’t exist, but he also doesn’t want a home where you walk into an immediate split-level situation, where “there’s just a little 4-foot-by-4-foot landing space. We would not move on a home like that. It’s just uncomfortable.” One realtor mentioned that preference on this sort of detail—no galley kitchen, for example—tends to be the final compromise buyers make in a low-supply market. Hill continues, “If you ever have friends or family over, it’s like they’re crowded in this tiny little spot. And then you’re forced to immediately go up or down stairs instead of kind of being welcomed into a home, right?”

For now, they’re busy creating the semblance of more space. “We work on trying to declutter stuff, room by room, on the weekends.” Overall, he’s not stressing over it. For one thing, there’s peace of mind in equity. “The things we’ve been doing to our home over the last few years are the types of things that make it more sellable,” he says. This past winter, they replaced some old, peeling linoleum tiles in the storage room. “You can get a roll of vinyl for, like, 100 bucks.” Plus, he now has homeowning experience. “Having multiple projects that I’ve worked on throughout the years, you kind of develop a skill set. So, there aren’t nerves. When someone says, ‘Oh, this window is kind of rotting, you’re going to have to repair it’—I know that I can do that in three hours.”

That is, if he gets the chance. “Who knows? Maybe [the search] goes into the next school year. We have no idea.” He’s hoping for the next two months. “We’re happy, we’re comfortable. It’s just that we see the writing on the wall, with the kids getting older and wanting more privacy when they start going through adolescence.” A pause. “It starts to feel more crowded then.”

Advice From Jerry Moscowitz


Don’t wait on the market. “I’ve heard different people predict interest rates for years and years. And sometimes they’re right, and sometimes they’re not, and you don’t know what they will be. So, I think it’s a dangerous game to play. My feeling on this: If a person is in a position where they can financially do it and buy a house, if the rates continue to go up, you’re going to be glad that you didn’t play the game of waiting to see what happens. If [rates] go down, you’ll have an opportunity to refinance your home, right?”

Get preapproved so you can act fast. “Don’t assume that the house will just stay out there for three days. If you like it, chances are really good that somebody else likes it—maybe several other people like it.”

Consider ways to sweeten your offer. “You’re trying to do something to make a seller feel good about your offer—so, having your financing, and having a short inspection period, things like that help your offer stand out.”


Don’t count on buyers to overlook details just because there’s a shortage of available homes. “Don’t just assume that if you put it on the market, they will come in droves and they’ll bring you offers. So, those things that you know that you should have done on the house—it doesn’t even have to be expensive things; it can be little things—but they can really change the way a house feels when you walk in. You want to take care of those things so that a person, when they walk through your house, can place themselves there and it doesn’t feel like this is a place that they’re going to have to spend a lot of money on.”

Some pandemic trends may linger. Flex spaces or bigger bedrooms that might accommodate a home office should fare decently.