What Twin Cities Buyers and Sellers Can Expect in 2025

by Mark Johnson

A Local Real Estate Outlook from Hudson, WI

As we look ahead to 2025, there’s a sense of optimism returning to the Twin Cities real estate market—and we’re seeing similar signs here in Hudson, WI as well. Recent projections from the National Association of REALTORS® (NAR) show promising trends for both buyers and sellers, including more stable mortgage rates and rising home sales.

If you’re thinking about buying, selling, or investing in Hudson or the broader Twin Cities area, here’s what to keep an eye on.

Home Sales Are Set to Rebound

After a few unpredictable years, the market may be finding its footing again. NAR’s Chief Economist, Lawrence Yun, forecasts that:

Existing home sales will increase by 9% in 2025
New home sales could jump by 11%

What this means:

For sellers: More active buyers = more showings, more offers, and possibly better sale prices.
For buyers: Expect more inventory and renewed energy in the market.

In Hudson, we’re already seeing more Twin Cities buyers exploring homes just across the border, thanks to our community’s charm, lower taxes, and quick commute into the metro.

Mortgage Rates May Finally Stabilize

Mortgage rates have kept buyers and sellers guessing for the last few years. The good news? Yun predicts rates will settle on the lower end of recent averages by 2025 and into 2026.

Why this matters:

Stability allows buyers to plan long-term financing with more confidence.
Lower inflation and a balanced federal budget could help rates dip even further.
Sellers benefit too, as more buyers can qualify and move forward quickly.

Even a small decrease in mortgage rates can increase a buyer's purchasing power by thousands—especially important in competitive areas like Hudson and the west metro suburbs.

Buyer Demographics Are Shifting

The makeup of today’s buyers looks different than it did just a few years ago. According to NAR:

Multigenerational buyers are on the rise
Single women are entering the market at higher rates
All-cash buyers are more common
Urban areas are starting to regain popularity post-pandemic

What sellers should do:

Tailor your marketing to highlight features like extra bedrooms, in-law suites, or walkability.
Be ready for a more diverse pool of motivated buyers.

Here in Hudson, we’ve seen an uptick in families looking for homes that accommodate aging parents or adult children, as well as young professionals seeking a mix of affordability and lifestyle.

Home Prices Will Grow—Just More Gently

Gone are the days of double-digit price hikes year after year. Instead, NAR expects home prices to grow about 2% annually through 2025 and 2026.

The upside:

Buyers will welcome the return to a more balanced, predictable market.
Sellers will still benefit from steady equity growth—just at a more sustainable pace.

If you bought a home in Hudson or the Twin Cities five years ago, you’ve likely built significant equity already. This slower growth still adds value over time, without shutting out first-time buyers.

Multigenerational Living Is Gaining Ground

With affordability still a concern, many families are turning to multigenerational housing—a setup where parents, kids, and sometimes grandparents share a home.

Why it matters:

Larger homes with flexible layouts are in high demand.
Finished basements, guest suites, and separate entrances add serious appeal.
Sellers with these types of properties are well-positioned.

If your home in Hudson has space to comfortably house multiple generations, it might be more valuable than you think.

Final Takeaways for Twin Cities Buyers and Sellers

The 2025 real estate forecast is shaping up to be much more encouraging than the past few years. With:

Increased home sales
Stabilizing mortgage rates
Evolving buyer needs
Sustainable price growth

...there’s real opportunity on both sides of the transaction.

Whether you're buying your first home, upgrading, or downsizing, the key is to stay informed and work with a local expert who knows the Hudson and Twin Cities markets inside and out.