Mortgage Rates Dip, Inventory Rises: What This Means for Buyers and Sellers in Western WI and the Twin Cities

As we move into the spring homebuying season, there's a noticeable shift in the market that could impact both buyers and sellers in the Twin Cities and Western Wisconsin. Over the last few weeks, mortgage rates have dipped slightly, providing some relief to prospective homebuyers, while housing inventory continues to rise. These changes are creating a more balanced market, which means more opportunities for buyers and a slightly more predictable environment for sellers.

Let’s break down the latest trends and what they mean for those looking to buy or sell in Western WI and the Twin Cities in 2025.

Mortgage Rates Dip for Fifth Straight Week

For the fifth consecutive week, mortgage rates have dipped, offering a glimmer of hope for homebuyers who have been struggling with affordability. According to Freddie Mac, the average rate on 30-year fixed home loans dropped to 6.85% for the week ending February 20, 2025, down just slightly from 6.87% the prior week. Though the dip is modest, it's the continuation of a trend that could provide some breathing room for potential homebuyers as we move closer to the spring market.

If you’ve been thinking about buying a home in the Twin Cities or Western Wisconsin, this relatively stable rate environment could be a signal that now is a good time to start planning. For many buyers, the key challenge has been the unpredictability of rates, which have fluctuated considerably over the past year. But with rates now holding steady just below 7%, homebuyers can approach the market with a bit more confidence, allowing for more accurate budgeting and planning. This stability should continue into the spring selling season, potentially easing some of the stress buyers have been feeling in recent months.

A Slower, Cooler Housing Market Means More Room for Buyers

Although mortgage rates remain relatively high compared to recent years, the overall housing market is cooling down, providing buyers in the Twin Cities and Western Wisconsin with a unique opportunity. For the week ending February 15, 2025, the median list price of homes on the market showed a slight 0.5% dip compared to the same week last year. This marks the 38th consecutive week where the national median home list price has either remained flat or declined on an annual basis—a trend that is likely to continue into the spring.

For those looking to buy a home, this price cooling can be welcome relief. Although home prices are still elevated compared to a few years ago, the slow-down in price growth means buyers can take a bit more time making decisions, without feeling pressured into hasty offers. The added flexibility might also open up more opportunities for negotiating a better price or finding a home that fits your needs without competing with as many other buyers. The Twin Cities area and Western WI, known for their competitive markets, may start seeing buyers being able to secure homes at slightly reduced prices, particularly if they are patient and strategic.

Rising Inventory: A Shift Toward More Options

One of the most significant developments for homebuyers in 2025 is the continued rise in inventory. The number of new listings increased by 5% compared to the same week last year, and active inventory is up a substantial 27.6%. This marks the 67th consecutive week of rising inventory levels, and it’s a signal that the housing market is finally moving toward a more balanced state.

For homebuyers in the Twin Cities and Western WI, this increase in available homes should alleviate some of the pressure that has been building over the past several years due to a shortage of listings. Fewer buyers are competing for each home, which gives you more options to choose from. The growing number of new listings can help you find a home that meets your specific needs, whether you’re looking for a spacious family home in the suburbs or a more affordable option in the city.

The rise in inventory also means that sellers who have been waiting for the perfect time to list may see a more competitive market than in recent years, but they will still have the opportunity to take advantage of the strong demand for homes in the area. It’s still a seller’s market, but it’s less intense than before, and more listings mean less competition overall.

Homes Are Taking Longer to Sell

Another key trend worth noting is the increase in time on the market for homes. For the week ending February 15, 2025, homes were staying on the market an average of six days longer than they did the previous year. This shift may seem like a minor change, but for buyers in the Twin Cities and Western WI, it could be a game-changer. With more time to view properties, weigh options, and make thoughtful offers, buyers can avoid the intense bidding wars that characterized the market over the past few years.

For sellers, the slightly longer time on the market may signal that buyers are taking a more cautious approach. While there is still demand for homes in the area, sellers may need to be prepared for a slightly slower process and adjust their expectations accordingly. Pricing a home strategically and making sure it's in great condition will be more important than ever to attract the right buyer in this evolving market.

Looking Ahead: What Buyers and Sellers Can Expect This Spring

As we move closer to the spring homebuying season, the housing market in the Twin Cities and Western Wisconsin is showing signs of balance. Buyers can expect more inventory and slightly cooler prices, giving them more options and a better chance to negotiate. Meanwhile, sellers may face more competition due to the increase in new listings, but the stability in mortgage rates and rising inventory can still work in their favor if they price their homes competitively.

If you're thinking about buying or selling in 2025, now is the time to get prepared. Whether you’re looking to take advantage of lower price growth as a buyer or considering listing your home in a growing inventory market, understanding these trends will help you navigate the market with confidence.

Thinking About Buying or Selling in the Twin Cities or Western Wisconsin?

The spring market is just around the corner, and now is the time to make your move. Whether you're buying your first home, upgrading to a bigger space, or selling for the right opportunity, we can help guide you through the process. Reach out today to discuss how these market trends might affect your real estate goals!