August 2026 Twin Cities Market Update: Higher Interest Rates Help

By Mark Callender

Hello, my name is Mark Callender and I am a licensed real estate agent with RE/MAX Results. Because I have been helping families buy and sell their homes for more than 18 years, I am now helping their children to buy their first homes and their parents to downsize. No matter the direction you’re moving, my goal is to make the process as calm and enjoyable as it can be.

If you’re a buyer in the Twin Cities, higher interest rates might actually be working in your favor, and here’s how that works. When interest rates rise, inventory rises right along with them. That happens because fewer buyers are active. A lot of them are sitting on the fence, waiting for rates to drop, and that’s the situation that can help you here in the Twin Cities.

Higher rates push inventory up. The pattern is pretty consistent. When rates go up, inventory goes up. When rates come back down, inventory drops and buyers flood back into the market. We’ve talked about this before, and there’s solid research from Keeping Current Matters showing just how much this can help a buyer in their negotiations. Right now, as a country, we have the most homes on the market in years, and this past July was one of the strongest summers for inventory since before the pandemic. That’s a big part of why higher rates can be a good thing for you.

Remember what 2020 and 2021 looked like. You may or may not remember it, but during and right after COVID, the market blew up. Interest rates sat at 3%, inventory was extremely low, and there were 30 offers on every home. Prices were skyrocketing, and they were skyrocketing precisely because there were so few homes to go around. Compare that to today, and the difference for a buyer is night and day.

More homes means more negotiating power. Because there’s more inventory, you’re not under pressure to throw out an offer the moment you see a listing. You have options, and options mean you can negotiate. Your negotiating power is much higher right now, and by negotiating, you might land a property for less than what it’s actually listed for. We’re starting to see this shift in the Twin Cities 13-county metro area. We’re still seeing multiple offers, but those tend to be on homes priced around 10% below market value. Plenty of other homes are sitting at or above market value, and on those, you can often come in and get the property for less.

You can claw back the rate, not the price. Here’s the piece every buyer should hold onto. As soon as rates do drop, and nobody knows exactly when that will be, the market is going to take off again. You can always claw back your interest rate when rates fall, but you can’t claw back the price. Buy low now, pay the higher rate for a while, and refinance to a lower rate once they drop. Rates are expected to hold in the mid to upper 6% range throughout the year, which points to two things worth knowing.

Inventory is forecast to keep climbing. With rates holding where they are, inventory growth is projected to pick up through the rest of the year, closing out at a historically normal level right around where it stood at the end of 2019. For buyers, that’s a win. Even if today’s rates aren’t your favorite, they’re helping grow the number of homes on the market. More homes for sale means more choices, more room to negotiate, and less pressure on you. The number of homes for sale is growing slowly but surely, and that means more options for your move.

So if you want to see what’s available in your area, or how long homes are actually sitting on the market, we’re here to help. Give us a call at 612-961-9448, email us at mark@markcallenderhomes.com, or visitcallenderhometeam.results.net. We’d love to help you find the right home at the right price.