What’s Next for the Housing Market? A Look Ahead to 2025 in Western Wisconsin & the Twin Cities

The real estate market has been anything but predictable over the past few years. With rising interest rates, limited inventory, and fast-paced sales, many buyers and sellers in Western Wisconsin and the Twin Cities are wondering:

Will 2025 bring some relief—or are home prices going even higher?

As a local real estate expert here in Hudson, WI, I’m keeping a close eye on what’s happening in our market and beyond. Let’s take a closer look at current trends and what you should expect in the year ahead.

Current Housing Market Snapshot

If you’ve tried to buy or sell a home recently, you know how competitive things have gotten. Here's a quick overview of what we're seeing:

• Mortgage rates have jumped to between 6.08% and 7.44%, up sharply from pandemic lows.

• Inventory remains tight, especially in high-demand areas like Hudson and the Twin Cities suburbs.

• Prices have soared, making monthly payments significantly higher for today’s buyers.

In many cases, mortgage payments today are double what they were just a few years ago for the same home.

Will Home Prices Drop in 2025?

This is the big question for most buyers and sellers. The answer? It depends where you’re looking. Here’s what industry experts predict:

1. Prices May Continue Rising in Most Areas

Despite affordability challenges, prices are still expected to increase in places where inventory is low and demand stays high—like:

• Hudson, WI

• The east metro of the Twin Cities

• Popular school districts and walkable neighborhoods

With millennials driving much of the demand, the market could heat up even more if interest rates begin to fall in 2025.

“Inventory is increasing, but nationwide, there’s still a housing shortage and significant pent-up demand.”
– Debbie Calixto, Sales Manager, loanDepot

2. Some Markets Could Stabilize or Cool

While many urban and suburban areas will stay competitive, rural and vacation markets in Western Wisconsin could experience a softening, especially:

• Lake towns or second-home markets

• Areas that saw rapid growth during the remote work boom

We may see more listings pop up as remote workers move back toward cities or sell investment properties.

3. Affordability Will Pressure Certain Price Points

In the Twin Cities, where prices have surged in recent years, some buyers are reaching their financial limits. That may cause:

• Stabilization in certain price brackets

• Fewer bidding wars on mid-to-upper priced homes

• Price corrections in overvalued neighborhoods

For buyers, this could open up new opportunities in areas that were previously out of reach.

What Should Buyers and Sellers Do Now?

While you can’t control the market, you can prepare for it. Whether you’re moving to Hudson, WI, or selling in the Twin Cities, here are some smart steps to take now:

✅ Know Your Budget

Meet with a few lenders and get pre-approved. Be sure to factor in:

• Monthly payments at current interest rates

• Property taxes

• Home insurance

• Maintenance and repair costs

✅ Partner with a Local Real Estate Expert

The housing market is highly local. What’s happening in Hudson might look very different than Stillwater or Minneapolis.

An experienced agent can help you:

• Understand current market trends

• Set realistic expectations

• Create a smart buying or selling strategy

✅ Stay Informed

Keep an eye on:

• New listings in your target area

• Price changes or days on market

• Mortgage rate shifts

In a tight market, speed matters—you need to be ready to act when the right home comes up.

✅ Be Ready to Compete

Even if rates drop in 2025, competition won’t disappear. To stand out:

• Get fully pre-approved, not just pre-qualified

• Know what you want (and what you’re willing to compromise on)

• Write strong, clean offers with minimal contingencies

What to Expect in 2025

Here’s what we’re likely to see heading into next year:

• Home prices may continue to climb in most parts of Western Wisconsin and the Twin Cities.

• Inventory will remain limited, keeping competition strong in desirable areas.

• Certain rural or overvalued markets may cool, giving buyers a bit more breathing room.

• Millennials and first-time buyers will keep demand strong in starter-home price ranges.

Final Thoughts

Whether you’re planning to buy, sell, or just stay informed, one thing’s clear: real estate in Hudson, WI and the surrounding region is still moving—just in more complex ways than it did a few years ago.

The best thing you can do? Stay informed and financially prepared.

If you’re considering a move in 2025 or just want to explore your options, I’d be happy to help you navigate your next step. Hudson is a special place to call home, and I’m always here to offer local insight, advice, or just answer your real estate questions.

Ready to make a move in Hudson or the surrounding area?
Let’s talk! Contact The Johnson Group at Coldwell Banker Realty today to start your journey.

📞 Call us today at 651-333-7656
🌐 Or visit www.johnsonhomegroup.com
📍 Serving Hudson, WI and the greater Twin Cities metro area

Click her to read the full article https://realestate.usnews.com/places/rankings/best-places-to-live

Written by Mark Johnson, REALTOR® and owner of The Johnson Group at Coldwell Banker Realty. With over 20 years of experience helping clients across Hudson, WI and the Twin Cities, Mark is passionate about delivering expert real estate guidance with a personal touch.