Inventory hits seven-year high as Minnesota’s housing market trends toward balance

(Aug. 17, 2026)—Hot of the press today Minnesota’s housing market continued building momentum in July as both buyer and seller activity rose despite elevated mortgage rates and ongoing affordability challenges. New listings and both pending and closed sales remained at four-year highs for the month, while inventory hit a seven-year high. Expanded inventory not only offers more choice to prospective buyers but also serves as a release valve for prices, market times and negotiations. Statewide, the market was the most balanced it’s been for any July since 2017. It is still undersupplied, but less so than in recent years, as the market shifts toward a more sustainable, balanced footing.

Highlights from July include:

• New listings rose 9.1% statewide and 8.0% in the Twin Cities metro
• Pending sales increased 2.7% statewide and 3.0% in the metro
• The median sales price was up 2.7% statewide and 3.3% in the metro

Market activity improving across key metrics

Activity improved across nearly every major indicator. Statewide, pending sales rose 2.7% while closed sales were up 11.2%. New listings climbed 9.1%. Year-to-date, statewide closed sales are up 2.7% and new listings are up 6.2% through July, pointing to a market that has strengthened steadily after a sluggish start to the year. The Twin Cities metro showed a similar pattern, as its pending sales increased 3.0%, while closed sales saw a 10.5% increase over last year alongside an 8.0% jump in new listings. Year-to-date closed sales in the metro are up a more modest 1.9%, suggesting the second half of the year is also picking up pace after a slower start.

“After some slower periods—including the first half of this year—it’s encouraging to see momentum building,” said Wendy Uzelac, President of Minnesota Realtors^®(MNR). “Buyers are finally seeing some breathing room around market times and negotiations, and sellers who priced realistically are being rewarded.”

Significant differences between market segments across the state:

• Pending sales under $400K were up 3.7%, while sales over $1M increased 18.0%
• Single-family home sales rose 3.8%; condo sales climbed 10.2%; townhome sales were up 2.8%
• Previously owned sales were 4.9% higher, while new construction sales slipped 0.2%
• Two-bedroom home sales rose 2.5%, while four-or-more bedroom home sales were up 7.7%
• Non-waterfront home sales increased 4.2% and private waterfront home sales rose 6.0%
• Sales were up 9.8% in Minneapolis but were 4.8% lower in St. Paul

More homes on the market gives buyers more leverage

Perhaps the most notable shift is on the supply side. Inventory statewide climbed 9.1% year-over-year to 20,084 units, pushing months' supply up to 3.5 months from 3.3 a year ago. In the Twin Cities, inventory rose 6.7% to 11,586 homes for sale, with months' supply up 7.1% to 3.0 months. These shifts can have real impacts on market dynamics. Buyers have more choice, more time and more leverage to negotiate. Meantime, sellers across the state accepted 98.3% of their list price while metro sellers accepted 99.1%—both figures are slightly lower than last July.

Homes are also taking slightly longer to sell—48 days statewide (up) and 40 days in the metro (flat). “As inventory rises, we’re seeing the market continue to move toward greater balance, though conditions vary by price point and property type," said Aarica Coleman, President of Minneapolis Area REALTORS^® (MAR). “That shift is happening gradually, even as homes continue to sell very close to list price.”

Home prices still rising but at a measured pace

Despite increased supply, home prices have proven resilient. The statewide median home price rose 2.7% to $375,000, while the Twin Cities median price rose 3.3% to $408,000. Appreciation has slowed, but price growth remains positive and reflects that ongoing imbalance between supply and demand—as well as a shift toward higher-end sales. It’s important to recognize that today’s price gains are more sustainable than those seen during the pandemic-era boom.

More measured price growth alongside rising inventory points to a healthier marketplace where buyers are better positioned yet sellers continue to grow equity and prices are more stable and less volatile. “Buyers have more options and more time to make informed decisions than they’ve had in years,” said Danielle Bickham Pelton, President of the Saint Paul Area Association of REALTORS® (SPAAR). “While the demand is there, today’s market still favors sellers who price thoughtfully, present their homes well and understand that buyers are shopping around before making an offer.”

Economy and rates

Minnesota's housing theme still boils down to affordability. On the national stage, the Fed again held rates steady under its new leadership—and even hinted that the next move could be up or down. They’re data dependent. Inflation has been stubborn since tensions flared in the Middle East. May saw the highest reading since 2023, as the conflict continues to drive energy prices. June and July numbers were slightly more encouraging but still above the Fed’s stated target. And because they follow the 10-year treasury yield, this of course pushed mortgage rates up toward 6.7%, the highest level in about a year. If the Middle East stabilizes and inflation cools, the outlook for the second half of the year could improve. But the fundamentals haven't changed: housing is local, tied to local jobs, local incomes, and local housing supply. Despite the uncertainty, owning a home hasn't lost its luster for most Minnesotans—it's still very much the goal.

These monthly press releases are presented jointly by MNR, SPAAR and MAR.