H
ouse prices in Minnesota are climbing faster than wages, pushing the dream of owning a home beyond reach for many. The state’s median home price has surpassed $400,000 this summer, while the median household income sits around $87,000—about $10,000 below the level needed to afford a typical home. The gap is widening across the Twin Cities and rural counties alike, eroding the traditional link between homeownership and middle‑class status.

    Andy Testin, a first‑time buyer from St. Paul, illustrates the struggle. After years of saving $600 a month for a down payment, he found a $190,000 house in 2017 but withdrew after a concerning inspection. By the summer, his savings had grown to $70,000, still insufficient against the rising market. After two outbid attempts, he finally closed on a two‑bedroom home in Lauderdale for just under $275,000. “Finding anything under $300,000 was nearly impossible,” he said. “Dual‑income households and investors made it feel out of reach.”

    Recent research shows that in many Minnesota regions, a buyer would need to earn more than $100,000 to purchase a median‑priced home. The Pew Research Center defines a middle‑income household as earning between two‑thirds and twice the national median—roughly $83,000 in recent years. Minnesota’s median income has slipped in real terms, with white and Asian earners topping the list and Hispanic, Black, and American Indian households earning less.

    The affordability crisis is not limited to first‑time buyers. A Realtor.com analysis found the Twin Cities lack enough listings for buyers earning $75,000, and even those with six‑figure incomes face a dearth of options. Derek Korpela and his wife, who bought a Bayport home after finishing professional school, now need a larger house for their growing family but find prices have surged by hundreds of thousands of dollars. “We’re fortunate to even think about it,” Korpela said, “but the cost is staggering.”

    The decline in affordable inventory has pushed many to consider renting. Andrew Babula, director of the real‑estate program at the University of St. Thomas, notes that builders are now focusing on smaller, more affordable units—such as townhomes and duplexes—rather than the single‑family homes that defined the post‑World War II era. “It’s not the same dream, but it still allows families to build equity,” he said.

    Starlon Pruitt, a first‑time buyer with a $400,000 budget, spent the spring and summer searching for a well‑conditioned home in a good neighborhood. Frustrated by competition and limited choices, he even considered a duplex to leverage rental income, but decided to pause his search until January when the market might soften. “The market isn’t favoring me,” he said.

    A U.S. Bank survey highlights the emotional toll of the affordability squeeze. While Americans still view homeownership as a key marker of success, many feel powerless in an economy that seems to dictate whether they can achieve it. Sarah Darr, the bank’s head of financial planning, notes that younger people are abandoning homeownership and family‑building plans because the cost is simply out of reach, not because it’s a lower priority.

    Professor Ryan Allen of the Humphrey School of Public Affairs warns that as homeownership becomes less attainable, the very definition of the middle class may shift. “The link between middle‑class identity and owning a home is fraying,” he said. “People who grew up believing homeownership was a realistic goal now find it increasingly impossible.”

    In short, Minnesota’s housing market is tightening: prices outpace wages, inventory is scarce, and the traditional path to middle‑class stability—owning a home—is slipping away for many. Families are forced to rethink their strategies, whether that means renting, seeking smaller homes, or waiting for a more favorable market. The dream of homeownership, once a cornerstone of the American middle class, is becoming a distant memory for a growing number of Minnesotans.