December Housing Market Update: Interest Rates, Market Trends & What They Mean for Southern Twin Cities Homeowners

December Housing Market Update: Southern Twin Cities

As we wrap up the year, I wanted to share a quick and easy snapshot of what’s happening in the Southern Twin Cities housing market — including Lakeville, Apple Valley, Rosemount, Prior Lake, Burnsville, and the surrounding communities. December is always a unique month in real estate, and this year is no exception. While things naturally slow down during the holidays, the market is still very much active — just in a different way. Here’s what I’m seeing right now.

Interest Rates Are Finally Stabilizing

One of the biggest changes we’ve seen recently is consistency in interest rates. While rates are still higher than the record lows we experienced a few years ago, they’re no longer bouncing around week to week. That stability is helping both buyers and sellers move forward with more confidence. For buyers, this means you can plan around your monthly payment again, there’s less competition than we’ll see in the spring, and more room to negotiate on certain homes. For sellers, it means buyers shopping right now are serious, fewer deals falling apart due to rate volatility, and less competition from other listings.

Inventory Is Low (As Expected for December)

Low inventory continues to be the story in the Southern Metro — and winter always tightens things even more. Well-priced, move-in-ready homes are still getting strong attention, homes that need updates may take longer to sell (which can create opportunities for buyers), and sellers face less competition, which can work in their favor.

Home Prices Are Holding Strong

Despite higher interest rates, home values in the Southern Metro haven’t taken a hit. This area continues to be one of the most desirable parts of the Twin Cities, especially for families looking for strong schools, community amenities, and long-term value. Prices are staying steady due to a strong local job market, ongoing low housing supply, and more buyers than available homes. If you’re a homeowner, chances are your equity is in a healthy spot heading into 2026.

Buyers Are More Intentional (And That’s a Good Thing)

The frenzy of blind bidding wars has cooled, and buyers are taking a more thoughtful approach. Today’s buyers are focused on monthly affordability, long-term value, major updates like roofs, furnaces, and windows, and location, commute, and community. Overall, this has created a more balanced and sustainable market.

So, What Should You Do This December?

If you’re thinking about selling, use this time to prepare. Deep cleaning, small repairs, and paint touch-ups go a long way. Getting your home ready now can put you in a great position for an early-year listing. If you’re thinking about buying, getting pre-approved now puts you ahead of the curve, and winter sellers are often more flexible. If you’re staying put, it’s a great time to review your home equity, check your insurance coverage, and make sure your home is winter-ready.

The Bottom Line

Even though it’s December, the Southern Metro housing market is stable, steady, and still moving. Confidence is slowly returning, and real opportunities exist for both buyers and sellers. If you ever want a quick home value check or a closer look at what’s happening in your specific neighborhood, I’m always happy to help — no pressure, no sales pitch. Just real information when you need it.