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Minnesota Housing Market 2022

Minnesota’s housing market jumped 8.3% year over year, with the average home value rising to $316,100. At the same time, the number of homes sold decreased by 13.0% and the number of homes for sale fell by 16.3%. According to Minnesota Realtors, the housing market in Minnesota has been growing for two years in a row. The median sale price of a Minnesota home in 2022 is about $50,000 more than two years ago.

According to a report from Minneapolis-area realtors, demand for homes in Minnesota is at a 20-year high, while supply is at a 20-year low. Those looking to buy a home can expect to see a competitive housing market.

How do I calculate my mortgage payment?

To calculate your monthly mortgage payment, we recommend using our Minnesota Mortgage Calculator. The formula to calculate it manually is very complex. Here is the equation:

To calculate your monthly mortgage payments in Minnesota, first enter your estimated mortgage amount, then your loan term, then the interest rate you think you qualify for. Keep in mind that the higher your credit score, the more likely you are to get the most competitive rate available. The term of your loan is the number of years you have to pay off your mortgage. The most common terms are 30 and 15 year mortgages.

In addition to the mortgage principal and interest, you will need to add monthly insurance costs, taxes and other fees. Property taxes and assembly fees are sometimes incorporated into the loan. Our Minnesota Mortgage Calculator also lets you add taxes and insurance to your monthly payment.

The Mortgage Calculator for Minnesota also has an option to enter your down payment amount. The more you invest, the less you will need to borrow and the lower your monthly mortgage payments will be.

What other fees do I have to pay?

There are other monthly expenses you’ll need to consider, such as home insurance and property taxes. When using our mortgage calculator for Minnesota, remember that property taxes paid as a percentage of owner-occupied homes average 1.10%, the 19th highest in the nation. Property taxes may change depending on your county.

Homeowners can also be part of a homeowners association (HOA) and must pay a monthly HOA fee in addition to their mortgage payment. HOA fees typically cover maintenance of common areas and often include services such as garbage removal. To enter these additional costs into the Minnesota Mortgage Calculator above, simply click on “Additional Inputs” (under “Mortgage Type”).

You may also need to consider private mortgage insurance (PMI). Homeowners will have to pay PMI if they don’t put down at least a 20% down payment on their home. With all these different costs, it’s helpful to use our Minnesota home loan calculator. Our Minnesota Mortgage Calculator will help you break down your costs so you can see what your monthly mortgage payments will look like under different scenarios.

For those looking to refinance an existing mortgage, our Minnesota Mortgage Calculator can also help you figure out your monthly payment — and you can check out our list of top refinance lenders to start that process.

What to know before buying a house in Minnesota

Before buying a home in Minnesota, it’s important to make sure your finances are in order. Here are the factors considered by financial institutions:

Minnesota has a diverse geography. About a third of the state is covered in forest, and the “Land of 10,000 Lakes” is known to have more than 14,000 freshwater bodies of at least 10 acres. Minnesota borders Lake Superior and is part of the Great Lakes region of North America. The North Star State is known for its outdoor activities, beautiful scenery, historic sites and attractions, and is home to many Fortune 500 companies.

More than half of Minnesotans live in the Minneapolis-Saint Paul metropolitan area. Also known as the “Twin Cities,” the typical home value in Minneapolis is $330,879. Due to Minnesota’s geography, some of the most common natural disasters in the Gopher State include floods, severe storms, tornadoes, wildfires, and winter storms.

Minnesota also averages about 110 days a year with at least one inch of snowfall. If you like snow, then Minnesota might be the right place for you! It is important to be informed of the impact that bad weather can have on the region you are interested in.

Learn more: Homebuyer’s Checklist

Tips for First-Time Home Buyers in Minnesota

Here are some important tips for first-time home buyers in Minnesota. There are several programs available to first-time home buyers through Minnesota Housing, the state’s housing finance agency.

Minnesota Housing offers several programs to provide access to safe, decent, and affordable housing, and to build stronger communities across the state. In 2021, Minnesota Housing distributed $1.92 billion in resources and served more than 93,504 households.

Here are the different programs offered by Minnesota:

Minnesota Housing – Getting Started

Start Up is a Minnesota mortgage program for eligible first-time home buyers, available from participating lenders. Starter offers:

  • Affordable interest rates
  • Three down payment and closing cost assistance loan options for eligible borrowers
  • Income limits up to $120,600
  • The cost of acquisition must be below certain limits depending on your place of residence

Housing in Minnesota – Step Up

Step Up is a statewide program in Minnesota for repeat buyers or current homeowners to purchase or refinance a home. Step Up offers:

  • Affordable interest rates
  • Down payment and closing cost assistance loan for eligible borrowers
  • Income limits up to $156,800
  • Purchase price/refinance loan amount must be below certain limits

Minnesota Housing – Monthly Payment Loan

This Minnesota program is designed to help homebuyers with the costs of buying a home. This program is available with Start or Step Up and borrowers can receive monthly loans of up to $17,000 to be applied towards closing costs and down payment. Loans are fully amortized over 10 years and additional eligibility conditions apply.

Minnesota Housing – Deferred Payment Loan

This loan is for first time home buyers and is only available with Start Up. Borrowers can get up to $12,500 with the Deferred Payment Loan or $15,000 with the Deferred Payment Plus Loan. There are other benefits to this loan, but borrowers must meet certain criteria to qualify for the loan.

Loans and programs for home ownership

Here are other homeownership programs that homeowners can consider:

  • FHA loans are mortgages repaid by the Federal Housing Authority and require a 3.5% down payment.
  • VA loans are for military service members and require a 0% down payment.
  • USDA loans are government guaranteed loans for qualifying properties and require a 0% down payment.
  • Fannie Mae and Freddie Mac are conventional loans that require a 3% down payment.

Decide on a home buying budget

Once you’ve decided on the best plan and shopped around with different lenders, it’s important to decide on a home buying budget. Many experts recommend that your monthly house payment (including additional costs) not exceed 30% of your monthly income. You must also have enough money saved for closing costs (eg attorney fees, title insurance, taxes, etc.). Other costs such as loan fees, inspections and processing fees are generally not covered by the loan.

Read more: Best mortgage lenders for first-time home buyers

Still have questions ?

Here are some other questions we answered:

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