For the first time ever, the median price of a home in the Twin Cities metro area (which includes Minneapolis, St. Paul, and surrounding suburbs) has gone over $400,000. In June 2025, the typical home sold for $401,000. “Median” means half the homes sold for more than that, and half sold for less. This is a big milestone for the local housing market, but not exactly a surprise. Home prices have been slowly rising for the last few years.

Prices Are Growing Slowly but Steadily

The increase in price isn’t part of some sudden boom. Compared to the same time last year, the median price only rose by about 2.8%. That’s a pretty average rate of growth, according to real estate analysts. It shows that prices are rising in a stable, predictable way—not spiking like they did during the pandemic-era housing frenzy. Experts say this kind of slow growth is healthy for the market, but it still makes it harder for first-time buyers to get in.

It’s Getting Harder for People to Afford Homes

Even though home prices aren’t skyrocketing, affordability is still a big problem. Interest rates are currently hovering around 7%, which means monthly mortgage payments are much higher than they were just a few years ago. On top of that, wages haven’t gone up as fast as housing costs, so many buyers are getting priced out. Some would-be buyers are choosing to wait it out or continue renting, even though they’d prefer to own a home.

The Cost of Owning Goes Beyond the Mortgage

Buying a home is just the beginning—owning one is expensive too. In Minnesota, homeowners spend an average of $19,000 a year on things like property taxes, insurance, utilities, and maintenance. Out of that, about $7,000 typically goes just to regular upkeep like repairs, lawn care, and cleaning. These ongoing costs often surprise first-time buyers who focus only on the down payment and monthly mortgage bill.

Not Enough Homes Means Higher Prices

One big reason prices keep climbing is that there just aren’t enough homes for sale. The Twin Cities metro area is short by about 50,000 homes, according to housing experts. This shortage makes it hard for buyers to find something in their price range and puts upward pressure on prices. Without more housing being built—especially entry-level and affordable options—the market will likely stay tight for the foreseeable future.