Key insights:

• Prices are still rising across the Twin Cities metro, Minnesota and Wisconsin.
• The supply of homes for sale is growing, but it’s still a seller’s market.
• Days on market continue to increase, giving buyers more time to make decisions.
• Interest rates dropped to a three-year low in mid-September, giving buyers more buying power.
• Real estate is hyper-local, and an experienced professional is essential.

Fall homebuyers, take note

If you didn’t meet your homebuying goals this summer, don’t fret—there’s still time to get into your dream home before winter weather sets in. In fact, while it’s still a seller’s market, conditions have been moving to be more favorable to buyers, with homes staying on the market for longer and interest rates hitting a three-year low in mid-September. And with some buyers deciding to wait until after the holidays to resume their home search, those who continue on the hunt now can benefit from reduced competition. Here are five insights you can use as you look to buy your home this fall.

Buyer reality #1: Home prices continue to rise

Affordability remains a top concern for many buyers, especially those buying their first home (reminder that current homeowners have record-high equity and can put it to work on the purchase of their move-up property). This has made some would-be buyers delay their home purchase, hoping for prices or interest rates to come down.

In August, the median sales price climbed 2.3% in Minnesota to $360,000, 2.8% in the Twin Cities metro to $399,999 and 5.3% in Wisconsin to $338,000. High demand and low inventory have left buyers competing over the same homes, which drives up sales prices.

The reality is that home prices are likely to continue to increase, and would-be buyers who delay their purchase are missing out on building home equity and personal wealth. This makes waiting more expensive in the long run.

Buyer reality #2: Home inventory is growing, but remains low

The good news for buyers is that home inventory has been growing for the past 24 months (August marked the first decline in the metro area), giving them more options and reducing competition slightly. That said, it’s still a seller’s market, which is marked by an undersupply of homes for sale. Generally speaking, a balanced market needs around five to six months of supply. Anything less is a seller’s market; anything more is a buyer’s market.

• Minnesota is undersupplied with 3.1 months
• The Twin Cities 16-county metro is undersupplied with 2.7 months
• Wisconsin has a range of 3.6 months in urban counties to 5.9 months in rural counties (July data)

Buyer reality #3: Homes are taking longer to sell

When buyers compete over the same properties, sellers reap faster sales, especially when there is a shortage of homes for sale on the market. But the good news for buyers is that with growing supply, the average time a home spends on the market before selling has been increasing in recent months, averaging:

• 42 days in the Twin Cities 16-county metro area, according to the Minneapolis Area Association of REALTORS®
• 40 days in Minnesota, according to the Minnesota Association of Realtors
• 66 days in Wisconsin, according to the Wisconsin Realtors Association (July)

This gives buyers more time to make decisions and find the right fit. However, buyers should still have a clear plan for what they’re looking for, in what area, at what budget and in what timeline.

Buyer reality #4: Rates can impact buying power and market activity

Mid-September brought a decrease in mortgage interest rates, giving buyers more buying power. Even a slightly lower interest rate can offer significant savings on a monthly mortgage payment and give buyers the ability to afford more home or expand their search.

Buyers who are waiting for interest rates to come down further should consider this: when rates are lower, more buyers enter the market, which increases competition and can increase sales prices as a result. No one market metric operates in a vacuum, and while a lower rate offers more buying power, increased competition and sales prices can have the opposite effect, so it may not pay to wait for rates to drop further.

Buyer reality #5: Markets are hyper-local

Neighborhood, location, condition, price, property type, timing and more play a role in real estate market dynamics. While you may have access to information, it takes an experienced professional to help you understand what it all means so you can make an informed decision and move forward with confidence.

Thinking about buying?

Ready to start your home search and get settled before the holidays? Reach out for the real estate help you need to achieve your homeownership goals.

All Minnesota and Twin Cities information is based on data reported by the Minneapolis Area Association of Realtors for Aug. 2025. Wisconsin information is based on data reported by the Wisconsin Realtors Association for July or Aug. 2025.

Key insights:

• Buyers are searching for homes in move-in condition. With some simple upgrades, your pre-loved house can become a competitive listing.
• Rather than undertaking an entire home renovation, select a few updates that can be done quickly, inexpensively or DIY.
• Pay special attention to additions that buyers are known to love, like hardwood floors, exterior light fixtures and painted cabinets.

Wondering if you need to remodel your entire house before listing? Thanks to a 2024 study, “What Home Buyers Really Want,” conducted by the National Association of Home Builders (NAHB), you don’t have to guess. Now, you can appeal to today’s buyers by making a few easy tweaks to your property.

Plus, according to findings from the National Association of REALTORS®, 85% of today’s homebuyers purchased previously owned homes. So, if you’re thinking your pre-owned abode can’t compete with newly constructed properties, think again! Many buyers are searching for homes like yours — and they’re likely paying full price, too.

Below are five home projects that are smart, inexpensive and can help polish an outdated space. Plus, 80% or more of NAHB’s survey respondents deemed them essential or desirable!

1. Laundry room

A dedicated laundry space is a big draw to home buyers. Included are a washer, dryer, folding/ironing area and storage for drying racks, stain treaters, detergents and drying sheets. Remember that a laundry room often doubles as a space for cleaning supplies, so cabinets, closets and shelves all add value to the space. Bonus if there’s a utility sink for handwashing delicates and filling up mop buckets!

2. Outdoor space

Whether it’s a patio, porch or deck, buyers are eager for outdoor space that allows them to relax outside when the weather is nice. These areas can vary greatly from enclosed, backyard oases to a cozy corner to stop and chat with neighbors; it all depends on the space you have and how you use it. Landscaping is also a great way to increase curb appeal and doesn’t have to involve a lot of labor to upkeep while you’re on the market.

3. Energy Star windows

Energy efficiency is a huge draw to potential buyers, and windows are a great place to start. Energy Star certified windows meet specified performance criteria that will help reduce a home’s energy use, lower utility bills and prevent air leaks and drafts, allowing homeowners to create a comfortable climate within their home. They also feature multiple panes of glass that are often cushioned with gas to help with insulation, as well as insulated frames to minimize heat transfer.

4. Exterior lighting

Not only will exterior lighting add visibility and safety to the property in the long haul, it will also improve your curb appeal as you sell your home.

Here are a few creative ways to install additional lighting to the exterior of your home:

• Replace front door lighting fixtures
• Add uplighting under the front porch
• Insert in-ground lighting along walkways
• Illuminate a pergola or deck with cafe lights

5. Hardwood floors

Hardwood floors are a go-to renovation for soon-to-be sellers. If your home already has hardwood floors, you’re in luck. Simply give your floors a clean and fresh shine by refinishing or resealing the wood.

If your property currently has carpet, linoleum or other flooring, it may be time to upgrade to hardwood floors. Laminate options are available for less money, while true hardwood will cost more (and may be more appealing to buyers).

Other highly sought-after features

Don’t have the money for new windows or the space for a dedicated laundry area? Here are a few other highly-rated updates noted by NAHB:

• Ceiling fans
• Garage storage
• Tankless water heaters
• LED lights
• Outdoor fireplace
• Table space in the kitchen or built-in seating in the kitchen

Moving forward with a home sale?

Looking for more tips about the selling process? You can rest assured that you have a market expert guiding the path to a successful home sale. Reach out today for help choosing smart home updates and posting your “for sale” sign.

Key insights:

• Those suffering from too little room or an ineffective space may be due for a move-up into something larger and with more amenities for a growing family.
• With lower mortgage rates, it is a good time to enter the market as a buyer. Fall also offers a less competitive market for homebuyers seeking the right fit.
• Home equity is at an all-time high, giving move-up buyers the financial backing to take on a larger down payment and mortgage.

You’ve been in your home for a while and feel like you’re ready for a change into something bigger and more in line with your family's needs. But is now the right time? Should you wait until the rates go down or the market changes? Would your current house even sell?

Before you make up your mind based on what-ifs, let’s take a closer look at why moving up may be the right choice and what you can expect from the market.

Do you need to move on and move up?

First things first—are you ready for a move up? Truthfully, you probably already know if your family needs more space or better amenities, but if you’re still unsure, consider these questions:

• Have you had additions to your family since you bought your home (kids, pets and parents)? Do any of them require their own room, a space in the garage or additional safety precautions like a fenced-in backyard or fewer stairs?
• Are you frustrated with your home’s layout? Is it making it more difficult to do everyday tasks like cooking, laundry or taking the dog outside?
• Are you spending more time traveling to work, school activities, doctors or visits with family and friends?

If you’ve answered yes to any of these questions, your family is probably ready for a move-up. Something with more rooms, a bigger yard and more functional space is needed for your family to live comfortably. Even if you feel like you can make your current home work, there’s most likely another home that would better suit your needs and make your home feel more like a haven, rather than a space you squeeze into.

Is it a good time to move up?

Fewer pending sales, slightly lower sales prices and fewer new listings are hallmarks of the autumn market. Fewer buyers in the market leaves more room for you to find the right home at a slower pace and with less competition. Sellers are often motivated to sell during this period, too.

Mortgage rates have also been coming down, causing reluctant buyers and sellers to enter the market and finally take action to either buy or list. As baby boomers continue to age, many are looking to either downsize, move closer to family or enter a 50+ community, adding a range of homes that are perfect for growing families. If you’re worried about rates rising again, know that you may be eligible to lock in your interest rate.

What does this mean? Homeowners like you are finding that selling and buying are a viable option. Those who are looking to trade up are in an especially good position.

Can you afford to move up?

According to data from CBS, the average homeowner has about $313,000 in equity in their home. As your home equity continues to grow, so does your home buying power. Note that the longer you’ve been in your home and the more you pay toward your mortgage, the higher your equity grows. Home price appreciation also contributes to the wealth of homeowners, and the steady rise in median sales prices is a good sign for current homeowners who are growing their wealth in hopes of a home trade-up.

In June of 2025, nearly 30% of existing home sales were paid for in cash by homeowners using the equity from their previous home sale, according to the National Association of Realtors (NAR). According to the 2025 NAR Home Buyers and Sellers Generational Trends, 45% of respondents noted that the down payment on their new home was paid for by the equity accumulated from their last home.

Ready to trade up?

Let’s talk about what your home could be worth and what amount of equity you could be working with as you start your search for a new home.

If you’re ready to get off the fence and into today's market, reach out and we'll get you started with the move-up process.

Key insights:

• Sellers have historically high equity, and homes are at historically high prices.
• The market continues to favor sellers despite supply gains and longer market times.
• Sellers can’t name their price; the market sets the home price.
• Sellers don’t get a second chance to make an impact, and pricing a home right from the start is crucial.
• Homes are spending a longer time on the market before selling.

When it comes to real estate market trends, it’s common for consumer expectations to be a little bit behind the reality of market dynamics. That’s why it’s important for buyers and sellers to work with a knowledgeable REALTOR^Ⓡ who has access to the latest market data, including hyper-local housing statistics, rather than relying on headlines and hot takes.

Nationally, areas in the South and West are tipping in favor of buyers. But in the Midwest and Northeast, real estate continues to favor sellers, according to information reported by Keeping Current Matters. Here are four realities for today’s sellers in Minnesota and western Wisconsin.

Seller reality #1: Today’s homeowners have record-high equity

At the end of 2024, the average mortgage-holding homeowner had approximately $311,000 in equity, according to Bankrate. Home equity grows when:

• You pay off more of your mortgage (and your home’s value stays steady)
• The market goes up and your home’s value increases (thanks to supply, demand and home price appreciation)

While some homeowners feel compelled to stay put due to a super-low interest rate, the reality is that capitalizing on your home equity and capturing a great price for your current home could mean you’re able to buy a new one that’s a better fit and still a smart financial move. It’s still a seller’s market, with months’ supply well under the 5-6 months needed for market balance.

Seller reality #2: Prices are at record highs, but you can’t name your price

A home is only worth what the market is willing to pay for it. Today’s buyers are discerning. They know the neighborhood and home features they are looking for, and how much they are willing to pay. Their primary focus is not to give you what you want for your home – it’s to pay what they believe your home is worth. Furthermore, record-high prices and interest rates in the 6-7% range have made affordability a key concern for many buyers. The great news is that many of today’s sellers are capturing close to 100% of their list price – and homes are at record-high prices.

Your Edina Realty agent will provide a comparative market analysis, which takes into account your property, the neighborhood and other public record data, to help you set your listing price. Once you know how much your home is worth in today’s marketplace, you can determine if it’s the right time to sell.

Seller reality #3: Inventory is limited, but buyers will move on

Sellers often have an attitude of “let’s try it and see” when it comes to setting their listing price. Many sellers believe a strategy of pricing their home higher will give buyers “room to negotiate down,” but the opposite is true.

Your home gets the most exposure and interest (online and in-person showings) in the first two or so weeks after it’s listed. This is when buyers are searching and adding homes to their list. If they see one that is out of their price range, they will move on. By overpricing your home, you may lose showings and even offers during that critical time.

Seller reality #4: Homes are taking longer to sell

The average time a home spends on the market before selling has been increasing in recent months, averaging in July 2025:

• 40 days in the Twin Cities 16-county metro area, according to the Minneapolis Area Realtors
• 38 days in Minnesota, according to the Minnesota Realtors Association
• 66 days in Wisconsin, according to the Wisconsin Realtors Association

These longer market times are due to growing home inventory, which gives buyers more options, less competition and more time to find the right fit.

Knowing what to expect when it comes to the time your home needs to be market-ready and staged to sell can help you feel confident as a seller, especially as you set your daily cleaning habits to ensure you and your home are always ready for a showing.

Thinking about selling?

The ever-changing market can be difficult to navigate – especially because real estate is hyper-local. Reach out today to get started on the buying or selling process.

Key Insights

• Minnesota and Wisconsin offer a variety of fun fall activities to get you in the spirit.
• Fan-favorite annual events like the Minnesota Zoo’s Jack-O-Lantern Spectacular are back for 2025.
• Get your tickets early and plan ahead—many events sell out!

Fall in Minnesota and Wisconsin is undeniably special. Be sure to enjoy the vibrant colors, crisp air and seasonal events by taking part in the variety of activities hosted across both states. From evening events on haunted ships to days spent at orchards with apple picking and hard cider, there’s something for everyone to enjoy.

1. Visit the Minnesota Zoo for the Jack-O-Lantern Spectacular

While the Minnesota Zoo is a favorite place for those who want to observe and learn about wildlife, this season it also features thousands of enchanting carved pumpkins at the month-long Jack-O-Lantern Spectacular. This “naturally magical experience” is ticketed, so be sure to reserve your spot in advance.

Date: Sept. 26 – Nov. 2, 2025

Time: View the website for specific times

2. Check out the MN Landscape Arboretum’s Scarecrows in the Gardens

The Minnesota Landscape Arboretum gets extra festive this time of the year. Visit their event, Scarecrows in the Gardens, for an interesting twist on an area favorite. Expert gardeners and artists share their knack for displaying autumnal plants and scarecrows.

Plus, you can enjoy the typical Arboretum amenities, like the shop and eatery, to complete your visit to this seasonal event.

Date: Sept. 20 – Oct. 31, 2025

Time: View the website for specific times

3. Experience Tricks and Treats at Valleyfair

Get ready to enjoy the exhilarating rides of Valleyfair with a seasonal twist. Tricks and Treats is a double event featuring both spooky Halloween festivities and nostalgic fall attractions.

Everything from live music, haunted stories, sweet treats and 21+ brews will be featured at Tricks and Treats. And, don’t forget to wear your Halloween costume! Event-goers are encouraged to dress for the holiday.

Date: Saturdays and Sundays, Sept. 27 – Nov. 1, 2025

Time: Saturdays and Sundays 12 p.m. – 6:00 p.m.

Looking for something a bit more…terrifying? Consider the park’s ValleyScare event for more intense thrills (parental discretion advised). Open select Fridays and Saturdays, Sept. 20 – Nov. 1.

4. Sign up for a spooky streetcar ride

The Como-Harriet Streetcar Museum is hosting seven different fall-themed trolley rides to celebrate the beauty of the lakes and Minnesota’s history – all while getting festive. This year’s rides include a Trick ‘r Trolley ride, Transylvania Trolley night and so much more! Remember to wear your Halloween costume in exchange for a Halloween treat.

Date: Oct. 4 – Nov. 1, 2025

Time: Visit the website for specific times

5. Get tickets to the Duluth Haunted Ship

The historic and infamous William A. Irvin Ship transforms into a haunted boat every fall. Book your Duluth Haunted Ship tour to get in the Halloween spirit – and for a promised “real scare.”

Date: Oct. 3 – 31, 2025

Time: Visit the website for specific times

6. Celebrate Oktoberfest in New Ulm

For two entire weekends in October, New Ulm is filled with German cuisine, live music and craft shows for their very own Oktoberfest. This Oktoberfest is inspired by one of Germany’s largest celebrations, making it extra festive for attendees.

Date: Oct. 3 – 4 and 10 – 11, 2025

Time: Visit the website for specific times

7. Visit the Sever’s Fall Festival

Head over to Shakopee, Minnesota, to solve the Sever’s Corn Maze. This hand-cut corn maze has been around since 1997 and features a new design each year. In addition to the maze, check out the Fall Festival events like the corn pit, pumpkin patch, petting zoo, food and live music!

Date: Saturdays and Sundays from Sept. 13 – Oct. 26, 2025, plus Thursday and Friday, Oct. 16 – 17 as part of MEA weekend

Time: Visit the website for specific times

8. Book a farm tour at Eagle Eye Farm

Hoping to spend extra time outside this fall? Plan a visit to Eagle Eye Farm in River Falls, Wisconsin, where you can experience unique events like farm tours and alpaca yoga while enjoying the fall weather.

Both public and private tours are available, so be sure to check the website to book a ticket for the event that best suits you.

Date: Daily

Time: Visit the website for specific times

9. Explore the Fall Color Finder and Minnesota state parks

Make a plan to adventure on your own fall color tour. The Minnesota Department of Natural Resources provides an interactive Fall Color Finder tool that allows outdoor enthusiasts to discover where fall colors are the brightest. This activity is fun for everyone! Plus, you can customize your tour to fit any day and time within your fall calendar.

Find more information on Minnesota State Parks, including hours and guidelines, here.

Date: Daily

Time: At your leisure

10. Pick apples and drink cider at Ferguson’s Orchards

Visitors of all ages are bound to enjoy the fall festivities at any of the four Ferguson's Orchards across Minnesota and Wisconsin. Guests can mine for gems, jump in the corn pit, go for a wagon ride and, of course, pick apples! After a fun-filled day at the orchard, fill up on refreshments and delicious goodies like classic apple cider, hard cider, pizza and seasonal baked goods.

Date: Daily

Time: Visit the website for open times at the different locations

11. Give the Great Pumpkin Chase at Lake Elmo Park Reserve a try

Get ready for some outdoor family fun! Take the scenic trails through beautiful Lake Elmo Park Reserve and enjoy the fall foliage during the Great Pumpkin Chase. With options for a 15k, 10k, 5k and half-mile kid fun run, there’s a race for every fitness level. Not a runner? You can still join in for the post-race bonfire and pancake breakfast.

Date: Sunday, Oct. 12, 2025

Time: Park opens and registration begins at 7:30 a.m.

12. See the Stillwater Harvest Fest

Known as the Midwest’s premier giant pumpkin festival, this weekend's event holds markets, competitions, races and plenty of pumpkins. Join for the pumpkin regatta, pumpkin drop, chili cookoff and kids activities, or take your time perusing vendors and enjoying the beer and wine garden. Admission is free and a shuttle service is available at several locations.

Date: Oct. 11 – 12, 2025

Time: Visit the website for specific event times

13. Take a Saint Paul walking tour

Take a 90-minute walking tour of Saint Paul! Choose between exploring the mysteries of the Union Depot with Ghost Tours or learning the haunted history of Summit Avenue with the Ghosts and Gables walking tour. Can’t choose? Each tour has a variety of dates and times throughout October, so you can do both!

Date: Aug. 29 – Oct. 31, 2025

Time: Visit the website for specific event times

Check out the fall housing market

Whether you’re hoping to buy or sell a home this fall, be sure to reach out and be on your way to a successful home sale or purchase this season

Key Insights

• An earnest money deposit shows the seller that you are committed to purchasing their property and is often held in escrow until closing.
• The amount of earnest money is dependent on the home and market conditions — talk to your REALTORⓇ to determine the best amount for you.
• Contingencies can be put in place to help ensure your earnest money deposit is either used toward the home purchase or returned to you.

When making an offer on a home, you will typically submit an earnest money deposit. This deposit shows the seller that you are deeply committed to purchasing their property. In most cases, this deposit is held in escrow until the date of closing and is then applied to your closing costs or down payment. The tips below explain why you should offer an earnest money deposit and what you should expect when you make an offer.

Why do I need to offer earnest money?

Earnest money is a way to ensure that your offer is taken seriously and protects sellers from being bound to buyers who aren’t fully committed. Earnest money protects both sides of the transaction and helps guarantee a smooth ride to closing.

How much should I offer in my earnest money deposit?

According to the National Association of REALTORS®, an earnest money deposit can range anywhere between 1 - 10% of the home’s total price. In a low inventory market, buyers sometimes increase their earnest money to strengthen their offer, but the appropriate amount depends on market conditions. Every home and homebuyer is different, so it’s important to work with your REALTOR® for insights about how much earnest money you should offer.

When and where should I deposit my earnest money?

Earnest money is an indication of your commitment to purchasing the home, and the purchase agreement typically requires it to be deposited within a specific timeframe. It is generally a good practice to complete the deposit as soon as possible after your offer is accepted and the purchase agreement is signed.

The earnest money deposit will typically be held in an escrow account by the listing broker until closing. An escrow account is a third-party account used to securely hold funds and documents until the transaction closes.

Will I get my earnest money deposit back?

If the sale is successful, the earnest money deposit is generally applied to the closing costs of the home or the down payment. However, earnest money deposits—like all deposits—do carry some risk if you don’t meet the original terms of the offer.

When you submit your offer, your REALTOR will advise you of the necessary contingencies to include in the terms. Then, if the home purchase cannot proceed due to a contingency not being met, your earnest money deposit is generally returned, in accordance with the terms of the purchase agreement.

Common contingencies include:

• Contingent on appraisal: Protects the buyer if the home’s appraised value comes in below the purchase offer.
• Contingent on inspection: Protects the buyer if an impartial inspector reveals unsatisfactory housing conditions.
• Contingent on financing: Protects the buyer if they are unable to find sufficient financing to purchase the home.
• Contingent on home sale: Protects the buyer if they are unable to sell their home before the closing date.

If the transaction is unsuccessful for reasons not covered by a contingency, such as the buyer deciding to buy a different home, the seller is typically entitled to keep the earnest money deposit.

What else do I need to know about making an offer using earnest money?

An earnest money deposit may seem a bit tricky, but you’re never alone in the home buying process. Together, we’ll walk through every step, from finding the right home to securing the right loan. Let’s connect!

Key Insights

• Buyers need to have their homeowner’s insurance policy in place before a lender will sign off on the mortgage amount.
• With insurance premiums rising and robust policies becoming harder to qualify for, buyers may be more interested in the home factors that contribute to their eligibility.
• As a seller, you should be prepared to answer questions about the home that insurance providers consider.

Congratulations — you have a buyer interested in your house! There’s still a way to go before you arrive at the closing table, but you’ve reached a huge milestone in your home-selling journey. For the most part, the ball is in your buyer’s court. They are working on finalizing the finer details with their lender, which means they are searching for insurance providers to cover their new property.

Lenders require that the buyer have sufficient homeowners insurance before they will sign off on the mortgage amount. But with insurance premiums rising, buyers are asking more questions about the home to help determine if purchasing that property could raise their insurance rates or even prevent eligibility. As the seller, you should be prepared to help answer questions about the home that an insurance company may have as they determine the buyer’s policy and coverage.

Home questions that could impact insurance rates

Here are a few questions about your home that you should be prepared to answer:

• How old is the roof? (The #1 eligibility factor!)
• How old is the furnace?
• Does the electrical system use knob-and-tube wiring?
• What number of amps do the fuses use?
• What is the siding like? What material is used, when was it replaced and what condition is it in?
• How is the plumbing?
• What is the AC system?
• Any major repairs or renovations?

Some of these answers may be included in your disclosures, while others may be uncovered during an inspection or from an appraiser. It’ll also be helpful to the buyer if you provide full documentation of your appliances, systems and any work you’ve had done to them.

Questions about your current insurance coverage

Some buyers may also ask you questions about your current coverage:

• What insurance company do you currently have? How long have you worked with this company? Did you get any additional quotes?
• Have you used any other insurance companies?
• What is the coverage amount for the property and what is the deductible?
• Are there any specific endorsements or riders?
• Have you had any history of claims or denied claims?
• Any history of water damage or flooding?

Get the help of a home expert

Remember that you don’t have to compile, communicate and manage this on your own.If you have any questions or are ready to start a home search of your own, reach out.

Key Insights

• Knowing the average lifespans of your systems can help you plan for repair and replacement.
• When it comes time to replace a system, there are signs to look out for.
• New options in HVAC are on the market and worth exploring.

Does it take forever for your shower to heat up in the morning? Does your air conditioner seem to be lagging in the heat of summer? It can be difficult to know when your home’s systems are in need of repair or replacement.

Here are general guidelines for how long your water heater and HVAC systems will last — and how you can tell it’s time to replace your furnace, central air and water heater.

How long does a water heater last?

Even with regular maintenance and servicing, your water heater will need to be replaced over time. And while there are some newer alternatives on the market (heat pump and solar), tankless and tank water heaters are most common. Typically, tankless water heaters last around 10 years, while tank water heaters (which are powered by electricity or gas) last six to 12 years.

Keep in mind, these numbers provide an estimated lifespan for your water heater. However, with due diligence (and possibly a little luck), your water heater could last much longer than this average life expectancy.

Signs that a water heater needs to be replaced

As with any appliance, your water heater will require replacement after years of working. Keep an eye out for the most common signs your water heater is on its last legs, even before your showers run cold.

Possible signs that your water heater needs to be replaced include:

• The age of your appliance
• Signs of rust or oxidation
• Improper draining
• A leaking tank
• Water that never gets hot, even when it runs for an extended period of time

What to know if you’re replacing your water heater

Is your water heater nearing the age of replacement? Whether it’s completely out of order or you think it’s about to quit, there are some things you should know when replacing your water heater:

Consider whether a tank or tankless water heater is right for you.

• Keep in mind that tankless water heaters may be more efficient than tank water heaters — they may take up less space, last longer and save energy.
• If you’re building a new construction home or adding on to your existing property, a tankless water heater could also be less expensive.

Ensure your new water heater requires the same type of fuel as your previous model.

• Generally, you’ll want to replace an electric water heater with a new electric model; the same applies for replacing a gas water heater with a new gas model.
• Sticking with the same fuel and type will minimize your expenses and avoid the need to retrofit your plumbing and electrical systems.

Search for an appliance with a longer warranty period.

• Water heater warranty coverage typically spans 3 to 12 years.
• Choose an appliance with a longer warranty period for extended protection.
• You might spend more upfront for a longer-warranty model; determine whether the warranty benefits are worth the cost for your home.

How long does a furnace last?

Changing your furnace filters and keeping the unit clean will help to increase the longevity of your central heating system. However, the average furnace needs to be replaced after about 15 to 20 years — depending on the model, maintenance and usage.

Remember, this data is an overview of a typical furnace lifespan and your unit may exceed these numbers or need to be replaced sooner. Every furnace is unique, but during the first 15 years of a furnace’s life, it’s usually more cost-effective to repair than replace the appliance. Over time, furnaces tend to wear down. So, around the 15 to 20-year mark, most furnaces are due for a complete replacement.

Signs that a furnace needs to be replaced

Aside from just noting the age of your furnace, pay attention to these key indicators that your furnace needs to be replaced:

• Rising utility bills
• Difficulty finding replacement parts
• Uncomfortable temperature or uneven air distribution
• Strange noises
• Presence of carbon monoxide
• Dry or dusty home

What to know if you’re replacing your furnace

Are you ready to replace your furnace today, or are you just planning for the future? Take these recommendations into consideration before your heating system dies out — and as you shop around for a furnace replacement.

Choose the right size furnace for optimal efficiency.

• The right size furnace will produce and distribute heat more evenly throughout your home.
• A furnace that’s too small won’t be able to heat your home during the colder months, whereas a furnace that’s too large for your space will likely cost more and waste energy.
• Choose a furnace with size specifications that meet your space. A reputable contractor can help calculate this number.
• Check the annual fuel-utilization-efficiency (AFUE) rating to determine how efficient a gas furnace is — a larger number (measured in a percentage) reflects a more efficient furnace.

Consider green appliances and watch your utility bills go down.

• Modern furnaces generally pollute less than older models.
• A new furnace can help offset previously high energy bills, as they are now manufactured to be more energy-efficient.

How long does an air conditioning system last?

Typically, the most reliable air conditioning systems last an average of 15 years, assuming the air conditioner is used for about five months out of the year. With this in mind, it remains important for homeowners to properly maintain their air conditioning systems in order to optimize the lifespan of the device.

To keep your home comfortable and cool throughout the warmer months, it’s necessary to invest in a quality air conditioning system. And you’ll want to know the common signs that your air conditioner needs to be replaced before your current system goes out.

Signs that an air conditioning system needs to be replaced

If you have an aging air conditioning system, look out for key signs that your air conditioner needs to be replaced. In addition to reaching the 15-year mark, your air conditioning system could be hinting at replacement with these signals:

• Growing energy bills
• Repair or spare parts cost nearly half the amount of a new air conditioner
• Uncomfortable temperature or uneven air distribution
• Strange noises like grinding or squealing
• Unusual smells from dust or mold buildup
• Poor indoor air quality

What to know if you’re replacing your air conditioning system

Modern air conditioners are built to last, which could result in a longer lifespan than their older counterparts. If you’re ready to switch over to a newer air conditioner, be sure to consider these central air conditioning insights.

Find an air conditioner that meets your home’s requirements.

• As with a new furnace, you’ll want to select an air conditioning system that is the right size for your house. (Keep in mind that because of technology advancements, it may not be the same-sized system that you already have.)
• You might purchase a smaller air conditioner if your home is more efficient than it used to be, or you may need to invest in a larger air conditioning system if you’ve made home additions.

Negotiate an air conditioning maintenance plan.

• All air conditioners require regular inspections and occasional services.
• Settle on a repair discount or warranty agreement when getting a quote for your new air conditioning system.

Don’t just replace your air conditioner, upgrade it!

• Search for a more efficient air conditioning system to cool your home and relieve your wallet.
• Consider installing an air-source heat pump.
• A higher SEER (seasonal energy-efficiency rating) typically indicates lower energy costs; aim for an air conditioner with a SEER of 15 or more.
• To further minimize your energy bills, program a smart thermostat to work in conjunction with your air conditioning unit. Adjust your temperature to a warmer setting during work or school hours, when your home is unoccupied.

Thinking of making a move?

Your home systems provide the necessary comforts to allow you to enjoy your living space year-round. If your living space isn’t measuring up to your expectations in other ways, it might be time to consider reaching out to see what your selling and buying options are in today’s market.

Key insights:

• Many of today’s buyers are paying close attention to fluctuating interest rates.
• Serious buyers who are ready to make offers on homes can consider “locking in” their interest rate as a way to protect against an unexpected (and unwelcome) increase in rates.
• Programs are available to help homeowners make the most of their home buying budget.

With ultra-low interest rates firmly in the rearview mirror, many buyers are paying close attention to fluctuating rates, understanding that even a fraction of a percentage point can add up when it comes to a home purchase. To maximize their buying power, today’s buyers might consider the option to “lock in” an interest rate. By locking in interest rates as they search and bid on properties, buyers can gain peace of mind and hedge against rising rates.

Here’s a quick primer on how that works.

What does it mean to lock in your interest rate?

While every mortgage lender may have a different process for locking in interest rates, borrowers can often lock in a rate at the same time that they are pre-approved for a home mortgage loan. Pre-approval essentially means that a lender has reviewed your financial documents and credit and deemed you worthy of a loan for a certain amount and on certain terms. Because a hike in interest rates could impact the buying power of a borrower, some lenders (like Prosperity Home Mortgage) offer the rate lock alongside the pre-approval letter, so that eligible buyers can set their budget and not be impacted by rising rates during their search.

Are all buyers eligible for a locked interest rate?

If a mortgage company offers borrowers the option to lock in their interest rate, the borrower must typically meet certain criteria. There will usually be a set period of 60-90 days for the lock¹, and it would be available to borrowers pursuing a certain type of loan program². Borrowers pursuing a jumbo, conventional or government fixed-rate loan would be eligible (provided they meet all other criteria as well).

At Prosperity Home Mortgage, the Lock, Shop & Home program offers eligible buyers the option to lock in their interest rate:

• If they are pre-approved through the HomeSURE Advantage® program³.
• If they request a jumbo, conventional or government fixed-rate loan program.
• For 90 days, as they search for a home. (Longer lock periods may be available².)

I plan to build a house, and a 90-day lock won’t work for me. Do I have any options?

Yes, many mortgage companies recognize that those on a building schedule will not benefit from a short-term rate lock. Some mortgage companies, including Prosperity Home Mortgage, offer a longer rate lock for those who are pursuing new construction financing.

Borrowers using Prosperity Home Mortgage’s Builder’s Assurance program, for example, are able to lock in their rate for 365 days⁴ if they are:

• Building a new construction home⁵.
• Pursuing a conventional, 30-year fixed-rate loan for $705,000 or lower.
• Planning to reside in the home as their primary residence.

As with Prosperity Home Mortgage’s Shop, Lock & Home program, the Builder’s Assurance loan program allows borrowers a one-time float-down⁶ to the current rate during their 365-day program.

How can I figure out which program is right for me?

Because most rate-locking programs only last 60 or 90 days, it’s important that you don’t lock in your rate before you’re truly ready to search for and purchase a home. Before you decide on rate locking or a certain loan program, it’s in your best interest to speak with a professional. You don’t have to figure any of this out all alone.

For no-obligation and no-pressure insights on the next best steps you should take, reach out. We can walk you through the steps you’ll need to take to keep moving forward.

<sub>1. Lock, Shop & Home program is NOT available for bond, jumbo, or renovation loan programs.
2. Interest rate lock available up to 90 days. Longer lock periods may be available. Additional fees may apply for longer lock periods.
3. HomeSURE Advantage® is not a final loan approval. A Commitment Letter is based on information and documentation provided by you and a review of your credit report. The interest rate and type of mortgage used to approve you for a specified loan amount is subject to change, which may also change the terms of approval. If the interest rate used for credit approval has changed, you may need to re-qualify. Information provided by you is subject to review and all other loan conditions must be met. After you have chosen a home and your offer has been accepted, final loan approval will be contingent upon obtaining an acceptable appraisal and title commitment. Additional documentation may be required.
4. Upfront fee will be due at the time of rate lock and is eligible to be fully refunded at closing.
5. Eligible for permanent financing only. Temporary financing for new construction is not available.
6. Interest rate is eligible for a one-time float-down to a current market rate within 60 days of closing. Interest rate may not float-down within 14 days of the closing date.
Prosperity Home Mortgage is an affiliate of Edina Realty. See Affiliated Business Arrangement Disclosure Statement</sub>

Key insights:

• Historically, home sellers invested in improvement projects before listing to generate more interest in their property.
• Today’s sellers hold a keen advantage in the market, so they should be sure to update only what is necessary before listing their home for sale.
• Data shows that some of the least expensive projects — such as a new garage door or a new front door — can have the greatest impact on a sale.

You’ve likely seen the headlines: It’s a seller's market, which means that they hold a big advantage in today’s market. With this news, you may not plan to update anything on your property before you list it for sale. If your home is in the right neighborhood and in good condition, this may be just fine! But if your home is outdated, you may get an even higher bid if you give it a little polish before selling.

But which projects can have the biggest impact for sellers? Shouldn’t some updates be reserved for homeowners who plan to stay in their homes and enjoy them for a few years?

These are the questions we asked as we dove into the 2024 Cost vs. Value Report (www.costvsvalue.com). This comprehensive report details the cost and value of home improvement projects across the country, and it even breaks the data out by region and city.

Based on that report, here are the projects Twin Cities homeowners should take on if they want to recoup the most on their initial investment.

1. Garage door replacement

Cost: $4,803
Resale value: $6,730
Cost recouped: 140.1%

When it comes to home updates, practicality can’t be beat! A new garage door is a solid investment, as it’s not something that’s necessarily an exciting update for potential new buyers. A new garage door can help with home security, energy savings and maintenance costs. Plus, it’s a great opportunity for homeowners to boost curb appeal and improve aesthetics!

Keep your current motor and replace the door with a four-section, galvanized steel version with pinch-resistant, thermal sealing and new tracks. A double coat of industrial paint and a lifetime warranty will help prevent any issues down the road. One note: if you’re adding a garage with top panel windows (and you should!), make sure they are ½ inch insulated frosted glass for weather proofing and security.

2. Steel entry door replacement

Cost: $2,409
Resale value: $2,866
Cost recouped: 119.0%

Just like a new garage door, a new entry door made of steel is a sound investment as it’s a low-cost renovation that adds security, helps save energy and ups the curb appeal.

Replace your current door with a steel version that’s factory finished with the same color on both sides and has a dual-pane half-glass panel. New door jambs and lockset complete the project.

3. Manufactured stone veneer

Cost: $11,748
Resale value: $11,617
Cost recouped: 98.9%

If you’ve seen new construction homes over the last few years, you know that partial stone veneers are all the rage. Current homeowners can also freshen up an aging exterior by adding a stone veneer accent to the bottom third of their home.

To complete this project, you’ll first remove the bottom third of siding from the street-facing side of your home exterior, then replace this area with a stone veneer, including sills, 40 corners, an address block and a detailed faux-stone archway around the front door. The installation also includes protection against water damage and corrosion.

You’ll be amazed at how this easy stone addition gives your home’s exterior a modern facelift!

4. Minor, mid-range kitchen remodel

Cost: $28,132
Resale value: $22,764
Cost recouped: 80.9%

A modest kitchen upgrade can better maximize space, increase accessibility and provide enough of a cosmetic improvement to bring a dated kitchen back to life.

Replacing a number of key appliances, cabinet/drawer faces and hardware, along with cost-effective flooring and counters and a fresh coat of paint on walls, trim and ceiling can offer buyers a blank slate that showcases the functionality of a crucial space.

Voila! A not-too-expensive update that saves you the cost of all new cabinetry or high-end finishes.

5. Fiberglass grand entrance

Cost: $11,892
Resale value: $8,620
Cost recouped: 72.5%

Replacing a standard entry door with a grander entrance can add a lot of curb appeal to your property. Fiberglass’s unique material keeps it energy-efficient and durable while being highly customizable, even able to mimic wood grain.

Start by removing the standard entry door and then cut and reframe the door opening for a larger door with dual sidelights. Customize the entrance with upscale finishes like color, threshold, lockset and decorative half-glass with sidelights.

An upscale fiberglass entry adds a big “wow” and should only take a day to complete.

Want more info on the ROI of home projects?

We’ve detailed the five projects with the highest return on investment, but the 2024 Cost vs. Value Report also shared the five projects with the lowest ROI in the Twin Cities. If you plan to move soon, you may want to avoid adding an owner’s suite or a brand-new bathroom.

Here are the home improvement projects with the lowest ROI locally:

• Upscale owner’s suite addition (18.0% recouped from budget of $370,214)
• Upscale bathroom addition (26.0% of $113,165)
• Midrange bathroom addition (26.6% of $64,868)
• Midrange owner’s suite addition (27.9% of $174,980)
• Upscale major kitchen remodel (31.1% of $161,085)

Wondering what other remodeling projects were reviewed for the Minneapolis region? Check out the complete 2024 Cost vs. Value Report for our area.

Get expert guidance before you sell

Keep in mind that it may be smartest to take on higher-cost, lower-ROI projects only if you plan to be in the home for a few more years. After all, your own enjoyment of these projects can certainly count as a return on your investment!

However, if your updates are solely intended to sell your home faster or for more money, reach out for advice on the most cost-effective, impactful changes you can make to your property.

Complete data from the 2024 Cost vs. Value Report can be downloaded free at www.costvsvalue.com, Distributed by Remodeling by JLC, ©2025 Zonda Media, a Delaware corporation.