The Spring Market Showed Up. The Rebound Still Didn’t.
If you have been watching the national housing headlines, you have probably seen the usual mix of optimism and confusion. Existing-home sales picked up nationally. Mortgage rates have improved from last year. Inventory has been rising. The easy conclusion would be that housing should be snapping back.
That is not what the March Twin Cities data says.
March 2026 looked more active than January and February, which is what spring is supposed to do. New listings rose. Inventory grew. Closed sales improved from winter lows. But when you compare the market to last March, the same core issue is still there: buyer activity remains soft, price growth is moderate, and sellers are getting a little less of their ask.
The market is moving. It just is not accelerating.
Let’s dig in.
Price Growth Is Moderate, Not Fast
The market is still appreciating, but the pace is moderate rather than impressive.
• Price Per Square Foot: Up 1.1% to $214.
• ShowingTime Housing Value Index: Up 2.2% to $327,039.
• Median Sales Price: Flat year-over-year at $380,000.
The Takeaway: March confirms what January and February were already hinting at. Appreciation is still happening, but it is moderate. The cleanest measure here is price per square foot, which rose 1.1% year-over-year, with the Housing Value Index up 2.2%.
That is a healthier message than either boom or bust. The market is still creating value, just at a measured pace rather than through easy price expansion.
The Volume Problem Is Still the Story
This is still the number that matters most.
• Closed Sales: Down 2.6% to 3,242.
• Pending Sales: Down 2.9% to 4,126.
• New Listings: Up 1.9% to 6,182.
The Takeaway: March was more active than the winter months, but the year-over-year picture is still soft. Closed sales and pending sales were both lower than last March, even with more homes coming to market.
That matters because spring is supposed to be the season when demand wakes up. Instead, what we got was a market with slightly better supply and still-muted demand.
The lock-in effect is still part of the story, but at this point the bigger issue looks like buyer caution. People can buy. They are just taking longer, filtering harder, and refusing to stretch unless the house is right.
Supply Opened Up Slightly. It Is Still Tight.
March brought a little more breathing room, but not enough to change the underlying market structure.
• Inventory: Up 3.3% to 8,524 homes.
• Months Supply: Up to 2.3 months from 2.2 last March.
The Takeaway: Yes, supply increased. No, this is not a buyer’s market.
A 2.3-month supply is still firmly in seller’s market territory. The difference now is that the shortage is slightly less severe than it was earlier this year. That is helpful for buyers, but it does not suddenly create abundant choice or pricing pressure.
For sellers, the message is simple: low supply still gives you protection. It does not give you permission to be unrealistic.
Days on Market: Buyers Are Taking Their Time
• Days on Market: 62 days, up 5.1% from 59 days last March.
The Takeaway: The market is not frozen, but buyers are clearly less urgent than they were a year ago.
This fits the broader pattern we have been seeing for months. The serious buyers are still out there, and the good inventory still moves. But buyers are taking more time to compare options, negotiate terms, and decide whether the payment actually makes sense.
That extra time matters. In a market with flat prices and improving affordability, urgency is no longer doing the seller’s job for them.
The Negotiation Gap Is Still Real
• Percent of Original List Price Received: 98.5%, down from 99.0% last March.
The Takeaway: Buyers are not meeting sellers all the way at their ask.
A half-point drop in list-to-sale ratio is not dramatic, but it is meaningful. It tells you the market is still clearing, just with a little more friction. Buyers are negotiating more. Sellers are giving a little more back.
That does not mean buyers can get reckless. It means leverage exists at the margin, especially on homes that are overpriced, stale, or simply too ambitious for the current environment.
Affordability Improved, But Not Enough to Create Urgency
• Housing Affordability Index: 126, up 2.4% from 123 last March.
The Takeaway: Affordability is still better than it was a year ago, and that is one of the main reasons the market is holding together.
But March also showed that improved affordability does not automatically create momentum. Buyers have a little more room. They just are not acting like they are afraid of missing out. That is a very different market psychology from what we saw a few years ago.
Mortgage Mix: Cash Is Still a Meaningful Part of the Market
From the mortgage utilization data, conventional financing remains dominant at about 70.0%, while cash purchases are around 16.3% and FHA is about 8.0%.
The Takeaway: Cash continues to matter, especially in a slower market where financed buyers are more payment-sensitive. When activity is softer overall, a meaningful cash share tends to support pricing on the best inventory and keep competition alive where sellers have something desirable.
What Should You Do?
For Sellers: You still have supply on your side, but you no longer have momentum on your side. March makes that clear. If your home is well-prepped and priced correctly, it can still move. If you overshoot, buyers now have enough alternatives and enough patience to make you wait.
For Buyers: Conditions are better than they were during the frenzy years. Supply is up, affordability is better, and sellers are negotiating more than they were a year ago. That is real progress. Just do not confuse a calmer market with a cheap one. It is not.
For Developers & Private Lenders: The structural undersupply thesis remains intact. Inventory is up, but months supply is still only 2.3. That continues to support the long-term case for new housing. At the same time, the weak pending and closed sales numbers are the warning sign. Demand is still there, but it is choosy and rate-sensitive. Underwrite longer absorption cycles, realistic sales pace, and no magic from seasonality.
This is still a market that rewards discipline more than optimism.
How We’re Positioned
At Carpathian Capital Managemet, we invest in residential development projects in structurally undersupplied markets around the country, and the Twin Cities remains a good example of what that looks like in practice.
A market can have flat prices and soft volume and still have a real housing shortage. March proves that. Inventory rose, but months supply is still only 2.3. That creates opportunity for disciplined builders and disciplined capital, not for loose assumptions.
That is why our focus remains the same: back experienced sponsors, structure for downside protection, and invest where supply constraints still matter.
Data Source: Minneapolis Area REALTORS® | March 2026 Monthly Indicators
