What the 2025 New-Home Sales Slowdown Means for Buyers and Sellers in Hudson, WI and the Twin Cities

What the 2025 New-Home Sales Slowdown Means for Buyers and Sellers in Hudson, WI and the Twin Cities.

National Overview: New-Home Sales Are Down, But Prices Are Up

The latest numbers from the U.S. Census Bureau show:

• New-home sales dropped 10.5% in January compared to December

• Median sales price rose to $446,300 (a 3.7% increase year-over-year)

Interestingly, the shift isn’t uniform across price points. Here's what we're seeing:

• Homes in the $300K–$399K range are seeing the biggest drop in demand

• Higher-end homes ($500K–$599K) are actually gaining traction

This tells us that buyers with higher budgets are still active—but affordability is a growing concern for the middle market.

What’s Happening Locally in Hudson and the Twin Cities?

While the Midwest saw a 16.7% drop in new-home sales, a lot of that slowdown was driven by January’s brutal winter weather—which stalled construction and delayed home showings.

Here in Hudson, WI, and across the Twin Cities, things are already picking back up as spring approaches. And with resale inventory still tight, new construction remains a key part of the market—especially for buyers who want customization and modern features.

The Impact of Mortgage Rates on Buyer Decisions

Another major factor weighing on the market is interest rates. As of early 2025:

• The average 30-year fixed mortgage rate is around 6.8%

• Fannie Mae expects rates to remain at this level throughout the year

What This Means for Buyers:

• Affordability is tighter, especially on entry-level homes

• Pre-approval is more important than ever to act quickly in a competitive market

• Buyers should consider alternative loan options (ARMs, buydowns, builder incentives)

Even with higher rates, buyers are still entering the market—they’re just being more cautious and strategic.

Why Buyers Still Consider New Construction

Despite price increases and financing challenges, new construction homes are still appealing to many Hudson and Twin Cities buyers.

Benefits of Buying New:

• Custom features: Choose finishes, layouts, and upgrades that suit your lifestyle

• Modern systems: Energy-efficient HVAC, new appliances, smart home tech

• Warranties: Peace of mind with builder-backed warranties

• Lower maintenance: Less worry about repairs in the early years

With inventory low in the resale market, new builds are often the only option for move-in-ready homes in certain price ranges.

What This Means for Sellers in Western WI and the Twin Cities

If you’re a homeowner considering selling, there’s good news: despite the slowdown in new construction, demand for well-priced homes is still strong.

Here’s Why Sellers May Be in a Good Spot:

• Low resale inventory gives your home a competitive edge

• Higher new-home prices make resale homes more attractive by comparison

• Spring is the busiest season in real estate—more buyers, more activity

That said, it’s still important to price strategically and market your home effectively. Buyers are picky and rates are high—they want to see value.

Key Takeaways for Buyers and Sellers

Let’s wrap up with the most important points to remember:

For Buyers:

• High-end new homes ($500K+) are still selling well—expect less competition there

• Mortgage rates around 6.8% mean getting pre-approved is essential

• Spring activity is heating up—now’s the time to prepare and act fast

For Sellers:

• Inventory is low, especially in desirable neighborhoods

• Spring is a great time to list, particularly if your home is priced under $600K

• Work with a local agent who knows the market—like someone based right here in Hudson!

Final Thoughts: Strategy Is Everything in 2025

While this year presents some challenges, there’s plenty of opportunity—especially in Western Wisconsin and the Twin Cities real estate market. Whether you’re looking to buy new, sell smart, or time your move just right, having a plan (and the right people in your corner) makes all the difference.

Thinking about buying or selling this year? Let’s talk about your goals and create a strategy that works for you in today’s market.

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

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.