Why the Twin Cities Housing Market Feels Frozen (Even at Record Prices)

Twin Cities home prices hit a record for the 14th year in a row. So why does this feel like one of the slowest markets in decades? I’ve been in this market 25 years, and what’s happening now is unlike anything I’ve seen. It comes down to one number.

Figures are as of my video above (July 2026).

The number: rates below 4%

Roughly half of homeowners with a mortgage have a rate below 4%, and they aren’t moving. Here’s the math on a $400,000 loan:

• At about 3%, principal and interest is roughly $1,700 a month.
• At about 6.5%, it’s close to $2,500 a month.

That’s nearly $800 more a month for the same home, before taxes and insurance. For a typical Twin Cities owner with an existing mortgage, buying a similar home today means a payment about 70% higher, not because the house changed but because the rate did. Freddie Mac estimates the average locked-in low rate is worth about $55,000 per household.

Why it feels frozen

Buyers didn’t disappear. Both sides slowed down at once. Owners who don’t sell don’t list, so buyers have fewer homes to choose from. The Twin Cities had about two months of supply, compared with five to six months in a balanced market.

New listings hit their highest level in three years, but buyers didn’t come back at the same pace, and limited supply still pushed the median to a record high, the 14th straight year of gains.

First-time buyers feel it most: the typical first-time buyer is now about 40, an all-time high. (More in the average first-time buyer is now 40.)

What staying in the wrong house costs

Maybe the commute changed with your job, the layout has bugged you for years, or repairs keep getting pushed off. A low rate doesn’t fix any of that.

Homeowners are now staying a record 11 years (median) before selling. And nationally, the typical owner spends roughly $16,000 to $21,000 a year on property taxes, insurance and maintenance on top of the mortgage. Every year in a house that doesn’t fit, you’re still paying that. The low rate stays the same; the cost of living in the wrong house keeps adding up.

When moving still makes sense

Forget the rate for a second and ask: what is this house actually costing me, and what would moving solve? A job change, a home that feels too small, or a big life change can outweigh the rate math.

• Downsizing changes the math. A lower price means a smaller loan, so even at a higher rate, the payment may be closer to what you pay now than you think. And right now there’s more room to negotiate on condos and townhomes than on single-family homes. See our downsizing guide.
• Equity changes the math. After 10 to 12 years, you may have a lot of it. Close to one in three recent repeat buyers paid cash for their next home.
• Timing matters. People who move before both sides of the market wake up at once may face less competition.

What unlocks the market

Rates. Freddie Mac has said the lock-in effect should ease as rates come down, bringing more listings and more buyers. NAR’s chief economist, Lawrence Yun, noted home sales recently hit their lowest level in about 30 years, and said there’s “light at the end of the tunnel.”

But lower rates bring buyers back too, not just listings. More listings plus more buyers means more competition, so the breathing room buyers have now may not last. Small rate dips over the past year already brought bursts of activity. When this market thaws, it’ll move fast. Buyers who are pre-approved and clear on their plan will be in the best spot.

Stuck deciding? Brooke and I will walk through your numbers and timeline. Set up a free strategy call, or start with the seller net proceeds calculator.