Spring 2025 Housing Market: Volatility, Tariffs, and Buyer Anxiety – Let’s Break It Down
Every spring, homebuyers in the Twin Cities brace themselves for a competitive market — but this year, it feels different. More stressful. More unpredictable.
And as I walk you through this, I’ll link the full article [here], but let’s dive into why this spring is especially tense for buyers.
First, mortgage rates. Early in the year, rates had been trending downward — a little glimmer of hope. But that all changed at the start of April, thanks in large part to a global trade war shaking up the financial markets. Rates suddenly spiked, touching near 7% at one point, even though they had dipped as low as 6.48% just weeks before. The volatility has been like a whipsaw, as Keenan Raverty at Bell Bank Mortgage put it — one day up, one day down, making it hard for buyers to plan.
Now, normally you might expect mortgage rates to track 10-year Treasury yields pretty predictably. But after new tariffs were announced in early April, we saw a bond market sell-off that broke the usual pattern — bond prices dropped, yields rose, and mortgage rates followed suit, wiping out the earlier declines.
In short, buyers have been left scrambling, trying to lock rates at the right moment, knowing that even a half-percent jump could cost them thousands over the life of their loan. And for first-time buyers like Jake Prohofsky, who’s trying to settle down before getting married, it’s been a pressure cooker. He’s stuck in a situation so many buyers now find themselves in: timing their purchase feels impossible. As Jake put it, “The climate is so unstable that the future could either be worse or lead to more homebuying opportunities.”
Let’s talk about the bigger picture too — because while rates have been unpredictable, the housing market itself remains very active.
According to new data from Minnesota Realtors and local Realtor groups, pending home sales in the Twin Cities metro were up 5.5% year-over-year in March, and statewide they were up 4%. Sellers were even more active, with new listings rising 11% across Minnesota and 12% in the metro. Prices also continued their steady climb, with the median sale price in the metro hitting $380,000 — a 3.5% jump over last year.
At first glance, that sounds like a strong spring market. But, and this is key: a lot of that activity was logged before the recent stock market declines and rate hikes tied to the trade war.
And if you look closely, you can already see signs of buyer anxiety creeping in. For the week ending April 5, buyers signed 20% more purchase agreements compared to the same time last year. Sellers responded too, listing about 8% more homes. But as Jennifer Livingston of the St. Paul Area Association of Realtors noted, while buyers are still motivated, they’re cautious. They’re ready to act fast — because if they don’t, someone else will — but they’re also more nervous than they’ve been in recent years.
And speaking of nervousness, let’s not ignore the bigger economic signals. Consumer confidence is dropping — Wells Fargo reported it fell in March to its lowest level since early 2021 — and people are worried about inflation, job security, and the broader economy. That directly affects housing. When people aren’t confident, they hesitate to make big financial moves, even if they still need a place to live.
Tony Weick from Bell Bank Mortgage said it best: “We’re all throwing darts right now.” Predicting where rates will be at the end of the year feels almost impossible. Most experts still think rates will ease a bit by December, but the path between now and then looks anything but smooth.
One more critical point from the article — even though sellers still have the upper hand, homes are taking a little longer to sell compared to the past couple of frantic spring seasons. It’s not 2021 anymore. Buyers are being choosier, and they’re less willing to panic-buy the first home they see.
Still, if you’re out there shopping, don’t expect a cakewalk. As Jake’s story shows, when a good home hits the market, it often disappears in hours — sometimes snagged by cash offers before a written offer can even be submitted.
So what’s my takeaway?
This spring, it’s all about balancing patience and decisiveness. Rates are swinging daily. Prices are still edging upward. And inventory, while better than it was a year ago, is still tight enough that hesitation can cost you.
In times like these, having a clear plan — and an experienced agent who can help you navigate the ups and downs — is more important than ever.
(Full article link: https://www.startribune.com/mortgage-rate-volatility-spring-housing-market-pressure-twin-cities-buy-sell/601331184)
David Gooden | 612-367-6025