As Home Market Slows, Minneapolis Landlords Face More Competition

While the single-family home market in the Twin Cities remains relatively robust, there are signs elsewhere that the market may be slowing.

High mortgage rates, a rising supply of homes for sale, and general economic uncertainty are all contributing to buyer hesitation. In fact, according to a recent Bright MLS survey, nearly 75% of real estate agents said their buyers paused their home search during the second quarter due to financial uncertainty.

The survey also revealed that more sellers are delisting their homes.

And guess what they’re doing if they absolutely have to move?

They’re becoming accidental landlords.

According to my favorite real estate reporter, Diana Olick, these new rentals are now competing with institutional investors like Invitation Homes. While most institutional investors own rental property in the Sun Belt, where housing inventory has grown over 20% in the past year, tax records show Invitation Homes currently owns 262 rental properties in the seven-county metro area.

This increased rental housing supply means more competition for Minneapolis landlords, especially those who own duplexes, triplexes, and fourplexes in the Twin Cities. That added competition can lead to smaller rent increases and higher turnover, think 1% increases instead of the typical 4–5%.

Since Minnesota hasn’t fully felt this pressure yet, Minneapolis landlords may want to act now: increase rent and renew leases where appropriate before conditions shift further.