Buyer Fatigue? Have you giving up? Some Perspective on the Market

This is Mike Fish from Minnesota Real Estate & Management, and I’m going to talk a bit today about what I see as a crisis. We’re really facing a crisis of buyer fatigue, and there are very valid reasons for that.

This morning, I was going through some of my follow-ups and looking at the list of buyers who are my long-term follow-ups — the ones who have basically kind of fallen out of the process and given up a bit. I want to be encouraging, but I also want to put things in perspective and help people be realistic.

We have had some very reasonable sales this year representing buyers for residential homes. But none of this comes as easy as it used to.

What I think we all need to accept is, we’re not going back to the mid-90s.
When I bought my first house at 21 years old on a $30,000 salary, it was a four-bedroom house. That world is gone. We saw the median price in Minnesota go from the low $200s — even below $200,000 — to where I think we’re tracking around $360,000 now.

And the truth is, there’s not really such a thing as a “starter home” anymore.

I had some sales over the last few years that really put this in perspective:
I saw a house in Brainerd that I sold for $190,000…
the buyer before that bought it for $90,000…
and the buyer before that bought it for $45,000…
all in the last 10–15 years.

Interest Rates and Buyer Fatigue

Part of the buyer fatigue right now is interest rates. Interest rates are never going back to 2–3%. I do think they are going to go down, and you can argue that next spring might be better or the year after that might be better. The truth is, interest rates are still way lower than they were in the 70s and 80s.

And as we say, you marry the property and date the rate.

Here’s my personal opinion:
You’re better off buying with a higher interest rate, because there’s a pie — and that pie doesn’t really change. It’s just a matter of how much the bank gets and how much the seller gets.

When interest rates are low, prices go up. You’re often better off buying at a higher interest rate that you can afford — and saving $50,000 to $100,000 on the purchase because you’re in a tougher higher-rate market — and then refinancing in a year or two. If you wait until interest rates drop and you’re back in multiple offers, you’ll pay more for the house, and that doesn’t necessarily help your bottom line.

Inventory Crisis

We’re also facing an inventory crisis.
This is supply and demand.

Building costs are high.
A huge number of homeowners are locked into 2–3% interest rates and are not going to sell just to triple their rate.
So inventory stays low, and that props up prices even though things are tougher on buyers.

Then add rising taxes and rising insurance.

So the “cheap starter home” is basically gone. I used to say it was tough to find something livable under $150K. Now I’d say it’s tough to find something livable under $250K. We’ve pulled off a few deals in that range, but a buyer has to be realistic — the inventory of what used to be starter homes is lower and much harder to find.

Most Buyers Want Move-In Ready — But That’s Harder Now

I feel like 80–90% of buyers today want a move-in-ready home, and they want a specific location in mind. I think buyers need to be more open to negotiating their “ideal picture” than they used to be. They may need to be open to a house that’s not perfect — and that’s the reality if you’re trying to find something that most people today can afford as their first or second home.

The average buyer right now is over 40 — almost 45 years old — and that says something about the market.

Conventional vs. FHA — My Honest Advice

Another key factor a lot of buyers have been caught off guard by:
If at all possible, you want to go with a bank that can get you a conventional loan, even if you don’t have 10–20% down.

There are conventionals now that go as low as 3% down.

You don’t want to get caught with the FHA regulations. Fifteen years ago, FHA made sense — “the house has to be in perfect condition.” Back then, you could find a house in perfect condition in a reasonable price range.

But now, if you’re shopping in the range most people consider a starter home, you’re not necessarily going to find a house that will pass FHA regulations on the backend.

So it’s really important to work with the right loan officer — an aggressive one with multiple products. And it’s important to work with an aggressive agent who will get in the door within hours if the right house shows up, but who is also willing to slow down and walk through issues on homes that aren’t perfect.

It’s more of a journey than it used to be.

Some Encouraging Reality

For all the negativity, here’s the truth:
The number of homes sold in Minnesota rose very slightly — about 1% — between 2025 and 2024, and rose about 1% between 2024 and 2023.

So yes, things look slower from the outside, but I want to encourage buyers that the market is still there. It just takes more time and more diligence.

I never pressure anybody.
Sometimes you have to look at 10–15 homes before you find the right one.
We do have to work harder than we used to — but it’s still far better than it was 5–6 years ago when things were crazy.

Five or six years ago, I had buyers who looked at 20–25 homes and wrote 4–6 offers and still lost every one because of multiple offers.

The market today is much more balanced. Aside from interest rates, it’s more reasonable for buyers who are realistic. We have a little breathing room right now.

We don’t know what next spring holds. If interest rates go down, next spring could be crazy again. We don’t know. I don’t have a crystal ball.

But for buyers asking, “Should we try again? Should we get back into the market even if we felt knocked off the horse a few years ago?” —
My honest answer is yes. I think it’s worth trying right now.

I’ve had several buyer closings in the last few months that went very well. Some of those took looking at more homes, and my buyers had to be open to a few more issues, but the market is still there.

This is Mike Fish with Minnesota Real Estate & Management. Hopefully I’m not discouraging you — I want to encourage you. I hope to earn your trust and business through honest conversations like this.

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