Housing market outlook: key trends that will shape the market
The housing market continues to be a dynamic and evolving landscape, influenced by economic conditions, mortgage rates and shifting consumer behavior. As we enter 2025, industry experts are weighing in on whether the stability of 2024 will persist or if another market shake-up is on the horizon.
Mortgage rates
Mortgage rates have been a key driver of market activity in recent years. The Federal Reserve made three rate cuts in 2024, but these had only a marginal impact on mortgage rates. Many hoped for more significant declines, but broader economic factors kept rates higher than expected.
Leading housing market institutions, including Fannie Mae, Mortgage Bankers Association, National Association of Realtors and Wells Fargo, predict that mortgage rates will drop below 6% by the end of 2025. This projection is significant because historical data suggests that consumer behavior shifts dramatically when rates cross the 6% threshold. When rates climbed above 6% in 2023, homebuying activity slowed considerably. A dip below that mark could lead to renewed buyer enthusiasm.
Golden handcuff phenomenon
One of the biggest challenges to housing market activity has been the so-called "golden handcuff" effect. According to data from the Federal Housing Finance Agency, nearly 70% of current mortgage holders have rates below 4%, with more than a quarter of those sitting below 3%.
For these homeowners, moving would mean forfeiting a historically low mortgage rate in exchange for a significantly higher one. As a result, many have opted to stay put, limiting the supply of existing homes on the market and contributing to inventory shortages.
Housing industry members make their voices heard at the Capitol
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Metropolitan Council adopts Imagine 2050 and Housing Policy Plan
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Builders & Remodelers Show connects housing industry professionals
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Legislators introduce ‘Yes to Homes’ agenda
Slate of bipartisan bills are aimed to increase housing options and opportunities across Minnesota
Nearly a foot of fresh snow did not stop a bipartisan group of legislators from introducing the most comprehensive slate of housing policy bills seen at the Minnesota Capitol in a generation during an early March press conference.
The “Yes to Homes” agenda is aimed at allowing for more housing options throughout the state and at more affordable price-points.
“Today, we as a group of Republicans and Democrats stand together in addressing the issue that is at the core of every Minnesota community: housing,” said Housing Committee Chair Spencer Igo (R-Wabana Township) when introducing the agenda. “Whether you live in St. Paul, up on the Range, in the
suburbs or in southern Minnesota, our communities need and are asking for more housing.”
The slate of bills is led by the “Minnesota Starter Home Act.” This language seeks to introduce new starter homes back to Minnesota by allowing for increased density without a costly and often indefinite variance process. Duplexes and accessory dwelling units (ADUs) would be allowed uses in residential zones.
“The median cost of a new single-family home is over $540,000, and that puts homeownership out of reach for many hard-working Minnesotans,” said Sen. Jordan Rasmusson (R-Fergus Falls) when speaking in support of the
“Minnesota Starter Home Act.” “This proposal focuses on cutting red tape to increase the supply of starter homes and empowering the free market to meet the demand.”
Minnesota’s housing deficit of approximately 100,000 units has been cited often over recent years, as Gov. Mark Dayton’s Housing Task Force originally stated that the state was approximately 50,000 units behind in 2018.
“Every moment we wait to take action, we fall farther behind,” said Senate Housing Committee Chair Lindsey Port (DFL-Burnsville). “Everyone in every community across Minnesota is spending more on housing and less on
New independent contractor law challenged in Federal Court
The Builders Association of Minnesota, Association of Builders and Contractors of Minnesota & North Dakota and a Minnesota homebuilder have filed suit against the State of Minnesota over a 2024 law changing when construction workers can be classified as independent contractors.
Sen. Jordan Rasmusson (R-Fergus Falls) emphasizes the urgent need for housing solutions across Minnesota. A bipartisan group of lawmakers introduced the “Yes to Homes” agenda at the Minnesota Capitol, marking the most comprehensive housing policy push in decades.
Industry legislative and legal initiatives on the move
The start of 2025 has been highlighted by several important legislative and legal initiatives moving through both the Legislature and the courts. We all know that the homebuilding industry continues to face significant regulatory and legal challenges, which is limiting choices for our customers across Minnesota. Housing First Minnesota, in partnership with key industry and allied organizations, remains committed to defending the interests of our industry and ensuring that state and local governments operate within their legal authority.
Comprehensive land use reform
A growing group of State House and Senate leaders have come together in an impressive show of bipartisanship to advance legislation to address our housing undersupply and affordability challenges. These leaders have created a collection of proposals to establish a new, statewide housing approval standard that allows more homes of all types to be built. These proposals will establish clear, modernized guidelines for more housing
choices while also providing cities the tools to respond to local needs and circumstances.
Construction worker misclassification challenge
In mid-February, Associated Builders & Contractors of MN/ND, et al v. Department of Labor & Industry (DLI) was filed in Federal District Court. The case argues that the new law violates key provisions of the National Labor Relations Act, adversely impacts the construction industry and is unconstitutionally vague. Initial action is expected on this case in the spring.
Permit challenges
The multi-year dispute on overcharging building permit fees in the cities of Corcoran and Dayton continues. This case argues that both cities charged permit fees far exceeding their actual costs and reasonable overhead, in conflict with state statutes and rules. With the reassignment of permit-related legal cases to Judge Hatcher following Judge
McGill’s retirement, the next hearing is scheduled for late March.
Housing First Minnesota remains focused on protecting housing affordability and our industry, while ensuring that regulations are applied fairly and lawfully. We will continue to provide updates as these cases progress. If you would like to sign up for updates on these key issues, visit HousingIndustryNews.org. Our industry’s success is critical to our communities and our state’s economy, let’s make our voice heard.
Onward, Tim Fohr, 2025 Board Chair, Housing First Minnesota
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The production shortfall reminds us that the Twin Cities region cannot afford complacency in meeting our housing needs. By ensuring our region’s housing supply meets demand, we can keep rents stable, support economic growth, and provide security for our residents. It’s about sustaining our communities for the long term and making the Twin Cities a place where everyone can thrive.”
ROBB BADER TWIN CITIES HOUSING ALLIANCE
America is facing a housing affordability crisis and the only way out of this crisis is to remove barriers like unnecessary and costly regulations that are raising housing costs and preventing builders from building more attainable, affordable housing."
CARL HARRIS NAHB CHAIRMAN
Given housing deregulation's many demonstrated benefits, this policy agenda deserves bipartisan support. Democrats should cheer the effects on equality, social mobility and the environment. Republicans should be delighted to see free markets spreading broad prosperity, creating new working-class opportunities and fostering family formation."
BRYAN CAPLAN GEORGE MASON UNIVERSITY
If paring back a century’s worth of rules and regulations is the right way to rebuild after a fire, it’s the right way to build — period. It’s the most important step we can take to restore the country’s lost social mobility and give Americans more control over their own destinies.”
YONI APPLEBAUM THE WALL STREET JOURNAL
I think that the fact of the matter is that a housing shortage means that someone’s going to miss out on housing in the place where they need it. What we’ve seen since the 1970s is the ratio of jobs being created in the most productive parts of the country does not match up to the homes that are being created."
JERUSALEM DEMSAS THE ATLANTIC
The city that does [allow more housing construction on small and irregular lots] will see more attainable house price points. It will see more housing units that are a better fit to small-household demographics. This also means it will free up citizen budgets and time such that, instead of spending all your time on a commute and instead of spending all your money on a house that's too big for you, you will have time and capacity and energy to be investing in your community.”
ALLI THURMOND QUINLAN FLINTLOCKLAB AND INCREMENTAL DEVELOPMENT ALLIANCE
New independent contractor law challenged in Federal Court
The law, which went into effect on March 1, 2025, replaces the nine-point test for independent contractors with a 14-point test and imposes penalties above and beyond those imposed under the National Labor Relations Act.
According to the suit, the law is being challenged because the National Labor Relations Act preempts states from imposing their own penalties and remedies on worker classification. The complaint also states that the 2024 law imposes a "collective bargaining scheme on independent contractors, whose labor practices Congress intended should remain unregulated."
The groups also allege the fines violate the U.S. Constitution on multiple fronts. First, the law includes "massive, compounding fines for even inadvertent, innocent, or technical violations,” which they claim violates the 8th Amendment. Secondly, the law is vague and difficult for the average person to understand, which the suit says is a violation of the due process protections of the Constitution.
A hearing asking for a delay in the implementation of the law took place Feb. 26.
The Commissioner of Labor and Industry and the Attorney General, the defendants in the lawsuit, had not made any public comments prior to the time of printing.
See housingindustrynews.org for updates on this developing story.
HOUSING ON THE HILL
Trade tariffs threaten homebuilding as industry faces cost surge
An executive order signed by President Trump would impose 25% tariffs on all goods from Canada and Mexico, as well as a 10% tariff on Chinese goods. After negotiations, the tariffs on Canada and Mexico were postponed until March 5. While these tariffs will likely impact the cost of everyday goods for American consumers, tariffs on building materials will also add pressure to the housing industry.
The U.S. imports more than 70% of the softwood lumber and gypsum that homebuilders rely on from Canada and Mexico. Other building materials sourced from the countries impacted by tariffs include hardware, plumbing fixtures, glass and glass products, and household and electrical appliances.
According to the National Association of Home Builders (NAHB), new duties on imports from these countries could raise
Legislators introduce ‘Yes to Homes’ agenda
education, food and healthcare because we just don’t have enough housing.”
Other targeted bills include the "More Homes, Right Places Act" that would allow for upzoning in the places that make the most sense, including along transit lines; the “Transforming Main Street Act” targeted at allowing condo and apartment construction in commercial zones; the “Freedom in Home Design Act” that seeks to increase affordability by addressing a common exclusionary zoning tactic, aesthetic mandates; and the “People Over Parking Act” that would remove parking mandates across the state.
During the release of the agenda, Bloomington City Councilmember Shawn Nelson mentioned that his city has taken many of the same approaches to removing
roadblocks and is finding results. But he also spoke in favor of state action.
“This can be done, it is being done, but we aren’t going to get there by having a few cities do this,” said Nelson. “We need the entire state behind this initiative.”
The press conference finished with comments from Rep. Michael Howard (DFL-Richfield).
“This team is ready to get to work, and we have an amazing and growing coalition that is supporting the “Yes to Homes” agenda. You’ll never see a more diverse group,” Howard said when emphasizing the more than two dozen organizations that are in support of portions or all the agenda.
The bills have been introduced in each chamber and are expected to receive committee hearings in the coming weeks.
construction costs by 3 to 4 billion dollars. The impact of this increase cannot be understated. With the existing housing shortage and high mortgage interest rates, these increased costs will discourage new development and price out even more consumers from homeownership.
Elon Musk, who leads the newly created Department of Government Efficiency (DOGE), voiced his support for
homebuilders on X (formerly Twitter), writing, “America is a nation of builders. Soon, you will be free to build.”
DOGE’s efforts to reduce government spending could have an impact on mortgage rates, but there are still questions surrounding the legality of the existence of DOGE and the role Musk has played within the federal government.
A hearing asking for a delay in the implementation of the law took place Feb. 26.
Rep. Michael Howard (DFL-Richfield) highlights the broad coalition rallying behind the “Yes to Homes” agenda.
Housing industry members make their voices heard at the Capitol
More than 100 Housing First Minnesota and Central Minnesota Builders Association (CMBA) members gathered in St. Paul on March 3 to discuss the housing market, legislative session and obstacles the industry faces before discussing these issues with their legislators.
The annual Housing Day at the Capitol event included a program featuring remarks from Housing First Minnesota and CMBA leadership emphasizing the impact of the day and what it means for the industry.
“This is shaping up to be a pivotal and impactful year at the Legislature, making it more crucial than ever for us to stand united as an industry,” said Tim Fohr, 2025 board chair of Housing First Minnesota.
A panel discussion featured a bipartisan slate of legislators who spoke about bills currently in play and housing priorities on the hill. The discussion, moderated by Housing First Minnesota CEO James Vagle, covered topics
ranging from zoning modernization to labor issues. The panel included Rep. Larry Kraft (DFLSt. Louis Park), Sen. Jordan Rasmusson (R-Fergus Falls) and Sen. Lindsey Port (DFL-Burnsville).
Housing Day comes at a timely moment in the Legislature. For many months, legislators from both parties have been working with a broad coalition of organizations, including city associations, to discuss bills focused on solving Minnesota's housing shortage. These bills have now been officially introduced at the Capitol.
Additional legislators addressed the group, showcasing the breadth of support and the bipartisan nature of housing issues. Speakers included Sen. Eric Lucero (R-Saint Michael) and Rep. Michael Howard (DFL-Richfield).
Kristen Crossman of Housing First Minnesota provided a market update that gave attendees insights into key indicators like mortgage rates, homebuilding activity and home prices.
Mark Foster, vice president of legislative and political affairs at Housing First Minnesota, then walked through the slate of housing and industry-related legislation. Foster shared policies and bills focused on improving housing affordability and attainability, but also discussed the many bills in the mix that would harm housing and increase the cost of housing construction and homeownership.
"This year's legislative session will provide a generational opportunity to address the state's housing deficit and affordability woes," said Foster. "Housing has quickly become one of the hot topics in St. Paul and your presence here today will make a significant impact."
That afternoon, attendees made their voices heard as they met with their own representatives to advocate for their industry by emphasizing the importance of keeping housing as a priority for the rest of the legislative session.
The fine art of creating Exceptional
Over 100 housing industry members joined together at the Capitol to advocate for homeownership and homebuilding in Minnesota.
Building efficient homes with electricity demand in mind
All-electric, high-efficiency homes are constructed to higher energy standards that can achieve lasting energy savings.
To support all-electric homes operating at peak efficiency, the electrical panel should be able to handle the home’s energy demands. An electric panel controls the flow of electricity, measured in amps, through a home and maintains consistent energy. When a home uses more electricity than the panel can handle, this can result in shocks, burnt switches and outlets, sparks, flickering lights and tripping breakers – all potential signs that an electrical panel can’t support the needs of the home.
Building a new home with a panel featuring enough amperage makes it easier for homebuyers to go all-electric – especially if solar panels, an electric vehicle or electric heat pump are on the horizon, now or in the future. This sets efficiency-minded homebuyers up for success rather than purchasing a home with a panel not equipped to support their electric, high efficiency way of life.
Customers who live in homes with panels that can’t handle the energy demand of their high-efficiency lifestyle can retrofit their panels to access additional electricity. Minnesota homebuilders can help educate customers on the importance of having the correct amperage panel and direct them to
Xcel Energy rebates to complete panel retrofits, if needed. If upgrading an electrical panel, homebuyers may be eligible for up to $1,500 in Xcel Energy rebates. The US Department of Energy also offers tax credits and/or rebates for electric panel or circuit upgrades. V isit xcelenergy.com to submit the rebate application.
Xcel Energy also offers several efficiency programs and rebates for new construction builders committed to energyefficient buildings. The Efficient New Home Construction program offers rebates for homes built above code requirements and offers prescriptive rebates for electric measures. Bonus rebates are offered for all-electric homes that meet ENERGY STAR® NextGen requirements. Visit xcelenergy.com to learn more about the program.
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Investing in community: Q&A with 2025 CMBA President Marty Czech
Marty Czech’s journey to becoming the 2025 president of Central Minnesota Builders Association (CMBA) has followed a trajectory centered on his natural propensity to invest his time and energy in his community. Originally from Pewaukee, Wisconsin, Czech attended St. Cloud State University and decided to stay in the area. In 2015, as part of his role as a real estate agent, Czech joined CMBA and soon became involved in various committees and leadership roles. His dedication to housing solutions in the area led him to also join the St. Cloud Planning Commission in 2016, an organization he currently chairs and where he actively works to address the growing housing shortage.
Q: What would you like to focus on during your term as CMBA’s Board Chair?
I am in a unique position as a REALTOR® and serving on the City of St Cloud Planning Commission. I hope to use my experience in both those areas to help cities, builders and developers in Central Minnesota work together better. The cities want and need new homes and developments. Like many other areas in the country, we're facing a housing shortage. Our builders want to build. We have to find ways to do that so more people can afford to buy homes.
Q: What are some challenges facing the St. Cloud region’s residential construction industry right now?
Shortages in labor. Shortages in lots. Costs of the infrastructure to create more buildable lots. Higher interest rate environment.
Q: What changes would you like to see at the state Legislature to address the housing crisis in Minnesota?
This is a problem without a simple solution. There are a lot of parties with roles to play. First, do no more harm to housing. Pause any planned updates on building codes or new regulations. Most Minnesotans simply can't afford them. The proposed zoning changes from the "missing middle" bill that were proposed last year are a start. Smaller lot size requirements, lower parking requirements and allowing more townhomes will also lower cost per unit.
We’re not just selling homes — we’re shaping the future of our community. Homeownership isn’t just about having a place to live. It’s about stability, opportunity and the chance to build something lasting.
Q: What inspires you to preserve homeownership for future generations?
Personal interactions I have had throughout my career fuel me. From 2006 to 2007 I had clients with good jobs tell me they couldn't afford to buy a house in the city they grew up in because the cost of housing had gone up so much. I watched a buyer visibly sag after I told him the price of our model home in 2021. He told me he'd been saving for 15 years and planning to downsize into a new patio home and that he'd just been priced out of the market. The St. Cloud school district
has around 1,000 students who are facing some level of homelessness – that's around 10%! Homeownership is fundamental to building strong communities and for families to achieve financial security.
Marty Czech
2025 Central Minnesota Builders Association President
Central Minnesota communities partner with CMBA to address housing shortage
As Central Minnesota grapples with a growing housing shortage, local communities are turning to Central Minnesota Builders Association (CMBA) and its members for solutions. With tens of thousands of housing units needed to meet current and projected demand, city leaders and industry professionals are working together to break down barriers to development and spur new home construction.
Recently, CMBA convened with mayors from six area cities, including five newly elected leaders, to discuss the challenges facing residential development. The mayors welcomed the opportunity to collaborate with developers, builders, contractors and Realtors, recognizing the need for a united effort to address the housing gap.
One key issue raised by CMBA members is the high cost of land development. Before a single home can be built, it costs between $70,000 and $100,000 to develop a single residential lot, making affordability a significant hurdle. Industry experts also pointed to local regulatory obstacles that complicate platting and development, further slowing the process.
One potential solution discussed was the idea of cities reclaiming their historical role in funding upfront infrastructure extensions for new developments. Instead of placing the burden on developers to finance roads, sewer and water services before construction even begins, municipalities could invest in infrastructure expansion to accelerate growth and lower costs.
Mayors agreed to hold quarterly meetings with CMBA to continue these discussions and work toward actionable solutions. The collaboration is expected to help streamline development, reduce financial burdens and ultimately make housing more accessible and affordable in the region.
Beyond its efforts with city leaders, CMBA is also engaged in a regional workforce affordable housing initiative led by St. Cloud’s largest employer, CentraCare. The organization recently hosted a Builders’ Roundtable focusing on local regulatory reforms and will cohost the second annual Regional Housing Summit in late April at St. Cloud State University. The summit will bring together policymakers, industry leaders and stakeholders to further tackle the housing crisis.
Spring home tours across Minnesota showcase the latest in design and construction
This spring, a variety of home tours around the state will showcase the latest in residential design, construction and remodeling. These events provide builders and remodelers a chance to connect with buyers and homeowners as the explore the homes for inspiration and insights into current industry trends.
Upcoming Home Tours
Spring Parade of Homes Twin Cities by Housing First Minnesota
March 7 – April 6 | Fridays – Sundays | 12-6 p.m.
Spring Tour of Homes by Central Builders of Minnesota Association
Met Council adopts Imagine 2050 and Housing Policy Plan
The Metropolitan Council, which is the policymaking body for the seven-county Twin Cities metro area, unveiled its Imagine 2050 plan early last year. Imagine 2050 is a regional development guide for the next 30 years, including plans for land, transportation, water, housing, parks and trails.
The 2050 Housing Policy Plan was adopted this February. The plan has seven objectives: fair housing and geographic choice; options to own and rent; stability; quality; cultural connection and well-being; equity; and environmental justice.
The proposal encourages higher-density housing in cities located in the outer suburbs and increases affordable housing opportunities. This includes various grants and funding opportunities, building code updates to encourage the construction of needed homes, requiring local plans to take local need for affordable homes into account, requiring local governments to identify ways they will create and maintain needed housing units, comprehensive data tracking, and developing a credit system for cities that have already successfully met affordable housing goals.
The 2050 Housing Policy Plan builds on the 2040 Housing Policy Plan, which was adopted more than a decade ago. While this proposal was somewhat successful in increasing housing production, more must be done in the region. The 2050 Plan focuses not just on building housing but building housing that meets the needs of residents.
With a 75,000-home shortage in the Twin Cities metro alone and changing demographics, creative solutions are needed to get more homes that meet the needs of residents built at prices that they can afford. Nearly 60% of U.S. households are only one or two people, contributing to a changing housing landscape. With guidance from the 2050 Plan, cities must be willing to adapt so that builders can effectively and efficiently meet the needs of all Minnesotans.
Area mayors agreed to hold quarterly meetings with CMBA to continue working toward actionable solutions to the challenges surrounding residential development.
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Housing market report
Homebuilders in the Twin Cities started 2025 on a high note. Metro homebuilders pulled 461 permits for single-family homes during January – a 28% increase over the same time last year. Multifamily construction remained largely unchanged year-over-year with 213 units for the month. However, activity was down month-overmonth with a 57% decrease compared to December. There were 465 permits issued for a total of 674 housing units during the four comparable weeks in January, according to the Keystone Report.
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New construction expected to remain steady
While existing home sales have struggled in recent years, new construction has remained a bright spot. Single-family home construction held steady despite rising mortgage rates, with permits for new homes up 14% in 2024, according to the Keystone Report. Builders have successfully attracted buyers by offering incentives such as rate buydowns.
Additionally, the demand for spec homes, newly built homes ready for quick move-in, has grown in the Twin Cities market. These homes have been an appealing option for buyers looking to secure a home quickly amid fluctuating mortgage rates.
However, the multi-family housing sector has faced significant challenges. Activity declined by more than 50% in 2023 and dropped another 55% in 2024. Financing difficulties and regulatory hurdles continue to pose challenges for developers, and these obstacles are expected to persist in 2025.
Hiring for residential construction made easy
What to watch in 2025
As the housing market moves forward, several key factors will shape the industry in the coming year:
• Mortgage Rate Movement – If rates dip below 6%, market activity could surge.
• Federal Reserve Policy – Additional rate cuts may provide further relief to buyers.
• Golden Handcuff Effect – Will more homeowners decide to sell, or will low mortgage rates continue to keep them in place?
• New Construction Demand – Single-family home construction is expected to remain strong as demand for new homes continues.
With shifting economic conditions and evolving buyer behavior, 2025 is shaping up to be another pivotal year for the housing market. Industry professionals and prospective buyers alike will be keeping a close watch on mortgage rates, construction trends and policy decisions that could influence the market’s trajectory.
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First-time homebuyers at 40-year low as housing market faces affordability challenges
The share of first-time homebuyers has hit a 40-year low, according to the National Association of Realtors' (NAR) annual Profile of Home Buyers and Sellers. The report reveals that affordability concerns, rising home prices and high mortgage rates continue to shape the housing market, forcing many prospective buyers to delay their homeownership goals.
Struggling to enter the market
First-time buyers accounted for just 26% of all home purchases in 2024, the lowest share since NAR began tracking this data in 1981. This marks a significant decline
from historical norms, where firsttime buyers typically made up 40% of the market. The report attributes this trend to persistently high home prices, mortgage rates above 6% and limited housing inventory.
“In today’s market, affordability is the number one challenge,” said Jessica Lautz, NAR’s deputy chief economist. “First-time buyers are struggling with higher monthly payments, student loan debt and limited savings for down payments.”
Buyer demographics shift The median age of homebuyers has
PulteGroup hosts inaugural charity curling event
Builders, trade partners and industry professionals took to the ice for a unique blend of competition and philanthropy at the first annual Stones to Homes: Pulte Charity Curling Event. Hosted by PulteGroup, the event brought together construction trade partners for an afternoon of networking, curling, and fundraising in support of Housing First Minnesota Foundation.
Held in a traditional bonspiel format, twelve teams faced off in friendly curling matches, while spectators joined in on the excitement with on-ice games, a raffle, a live auction, and plenty of food and drinks. The event not only celebrated the camaraderie of the homebuilding industry but also raised crucial funds for the Foundation’s mission to provide safe, stable and affordable housing for those in need.
“We are incredibly grateful to the Pulte team and all of the trade partners who made this event a success,” said Jessica Ryan, executive director of the Foundation. “Their generosity and enthusiasm help us continue our work in building and renovating homes for individuals who are transitioning out of homelessness and in need of housing stability.”
increased in recent years, reflecting the growing difficulty for younger buyers to enter the market. The median age of all buyers in 2024 was 49, while first-time buyers had a median age of 35.
Household composition has also shifted. Married couples continue to dominate home purchases, making up 61% of buyers. Meanwhile, single women accounted for 19% of buyers, more than double the share of single men at 9%.
Sellers reap the benefits of rising home values
On the selling side, homeowners
are seeing substantial returns. The typical seller in 2024 lived in their home for 10 years and sold it for $100,000 more than their original purchase price. This marks a significant increase from just a decade ago when the median profit was $30,000. Despite these gains, the number of sellers putting their homes on the market remains limited, as many are reluctant to give up their historically low mortgage rates. This “golden handcuff” effect — where homeowners are locked into low-rate mortgages — continues to restrict housing inventory and drive up prices.
26%
Home purchases that were made by first-time buyers
49%
Median age of homebuyers
New multi-unit complex in Eagan to provide homes for 34 veterans and families
This spring the Housing First Minnesota Foundation in partnership with the Minnesota Assistance Council for Veterans (MACV) and build partner Lennar will be breaking ground on their biggest project to date, Veteran Village. This first-ever multi-unit complex in Eagan will include 22 accessory dwelling units (ADUs) and will serve 34 veterans experiencing homelessness and their families. This permanent supportive housing will lead to an effective end to veteran homelessness in Minnesota, according to MACV. Minnesota would be only the fourth state in the
country to do this following Connecticut, Delaware and Virginia.
This project will be fully funded through individual contributions, in-kind donations and grant funding, with 100% of funds going directly to construction. Lennar and Lennar Foundation are also generously supporting another $500,000 dollar-for-dollar matching donation challenge bringing the industry together to provide dignified, safe homes for veterans.
The Housing First Minnesota Foundation, the charitable arm of the housing industry, has announced a new partnership with Elevate Hope House, a nonprofit dedicated to making an impact on young, single mothers and their children in Anoka County by providing them with safe, stable housing.
The construction of this home is being powered by students from the Construction Trades Program at Spring Lake Park High School. This program will give students real-world experience as they build the three-bedroom home from the ground up through hands-on learning that will leave a lasting impact on their future.
Once the students finish putting the finishing touches on the home, it will be relocated to its permanent site in Ham Lake in the spring. Land preparation and development for this project was completed by L ennar last year.
Lennar will break ground on Veteran Village this spring.
Builders & Remodelers Show connects housing industry professionals
More than 850 housing industry professionals gathered at the Canterbury Event Expo Center in February for the annual Builders & Remodelers Show (BRS), presented by Housing First Minnesota. The event served as a hub for builders, remodelers, architects and designers to explore the latest trends, products and services shaping the industry.
With 100 exhibitors showcasing the latest products and services, attendees had the opportunity to discover advancements in building materials, smart home technology and design trends. The show floor was abuzz with industry
professionals exchanging ideas and forging valuable business connections. From energy-efficient solutions to high-tech home automation, exhibitors provided insights into the future of home construction and renovation.
Beyond the exhibition, the event featured four Genius Huddle sessions, where experts shared insights on key topics influencing the housing market. Sessions included predictions for the 2025 housing market, emerging design trends, and creative marketing strategies to help businesses stand out in a competitive landscape.
“The Builders & Remodelers Show is an
incredible opportunity for industry professionals to network, learn and gain exposure to the latest products and trends,” said Mary Catherine Penny, events director at Housing First Minnesota. “Each year, the event continues to grow and evolve, providing even more value to those who attend.”
As the housing industry navigates evolving market conditions and consumer demands, the Builders & Remodelers Show remains a key event for professionals looking to stay ahead of the curve.
Builders earn top energy efficiency honors
Two leading Minnesota homebuilders, Lennar and Hanson Builders, have been recognized for their commitment to energy-efficient construction, earning Gold and Silver Designated Green Path Builder Status under Minnesota’s Green Path program.
Minnesota’s Green Path, developed by Housing First Minnesota, is the state’s premier energy efficiency certification for new homes. It sets high industry standards, offering Advanced and Master Certifications to homes that exceed energy code requirements. Builders earning a minimum of three certifications annually achieve Silver Status, while those reaching five or more earn Gold Status.
Leading the industry in sustainability
Lennar, the state’s largest homebuilder, built 15 homes that achieved Advanced Certification in 2024, securing Gold Status.
“The market has shown that energy efficiency and sustainability is a metric that homeowners really care about,” said Lucas Rutherford, purchasing manager at Lennar. “We diversify our portfolio with various product lines and implement new building
processes to lower the cost of construction so we can continue to meet the housing needs of the market and build communities.”
Lennar’s approach includes ENERGY STAR appliances, tankless water heaters and enhanced air-sealing techniques.
“Minnesota Green Path is a local program to highlight builders of exceptional products with high regard in energy efficiency,” Rutherford added. “As the cost of living continues to climb, by building quality, energy-efficient homes with lower monthly utility bills, we promote affordability and keep the dream of homeownership attainable in Minnesota.”
Hanson Builders earned four Advanced Certifications in 2024, achieving Silver Status. The company’s meticulous approach to energy efficiency is reflected in its blower door testing, which is conducted on every home.
"Lots of builders have these tests done, but it is what you do with the results that set us apart," said J.D. Hanson, president of Hanson Builders. "By addressing concern areas, we create homes that are both comfortable and efficient year-round.”
Hanson Builders also prioritizes high-performance windows,
superior insulation materials, and durable construction to reduce long-term environmental impact.
“By achieving multiple Advanced Certifications, Hanson Builders sets a higher standard for what it means to be a green builder,” Hanson noted. “These certifications are a clear indicator of our commitment to creating homes that are not only efficient but also sustainable, durable and healthy for the families that live in them.”
Minnesota’s Green Path continues to shape the future of homebuilding. Its Home Performance Reports (HPRs) provide transparency for buyers and reinforce the value of energy-efficient construction.
By participating in the program, builders like Lennar and Hanson Builders demonstrate that sustainability is not just an industry trend — it’s a competitive advantage. Their achievements in 2024 signal a growing movement toward higher-performing, cost-efficient homes that benefit both homeowners and the environment. Find more details on Minnesota's Green Path at MNGreenPath.org.
Innovation was on display at the annual Builders & Remodelers Show with more than 800 attendees exploring the show floor.
A quick recap of housing news and development updates
Construction on a 19,000-capacity outdoor venue started in fall 2023 after Minneapolis-based Swervo Development purchased 37.5 acres of land from Canterbury Park in Shakopee. The amphitheater will serve as the centerpiece of Canterbury Commons, a $400 million entertainment district that will continue to be built out over the next several years and will include commercial space, residential units and a hotel. The Amphitheater is scheduled to open in May 2025 under the operation of Live Nation, a leading live entertainment company.
“This partnership is an incredible opportunity to create a venue that meets the needs of artists and fans. Live Nation supports artists with deep expertise that will bring many more amazing shows in our region,” Ned Abdul, president and CEO of Swervo Development Corp., said in a statement. In a press release, Live Nation predicted the venue will host more than 30 events every summer concert season.
Bigelow Homes, a local builder headquartered in Rochester, hopes to begin work as soon as this summer on a new development in the northwest part of the city for 220 new homes. The site includes 8 acres of parkland and 220 lots. Of the 67.7-acre development site, a nearly 29-acre parcel has been approved for annexation. The Rochester City Council also approved a zoning change from “R-1,” which is for “larger lot” single-family development, to “R-2,” which allows more housing types.
“We’re excited about this,” said Tony Bigelow of Bigelow Homes. “We’ll have single-family homes in there, detached slab-on-grade, split levels, ramblers, two stories. I think we’ll have a good mix.”
Bigelow also stated that home prices could begin as low as $350,000. With local leaders willing to be innovative on annexation and rezoning, allowing for more affordability, Rochester’s construction boom has no end in sight.
Celebrating 30 Years of Building Hope & Homes
Shakopee amphitheater set to open this spring, operated by Live Nation
Rochester positioned for more growth
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