How ICE Is Impacting MN’s Real Estate Industry & What This Could Mean for You

Minnesota’s housing market has spent the past several years adjusting to rising interest rates, material costs and inventory shortages. Now, another factor has entered the conversation: increased ICE activity and its impact on the state’s construction workforce.

While immigration policy is debated at the national level, its effects are playing out locally in ways that matter to buyers, sellers and homeowners planning their next move.

Here’s what’s happening, and what it could mean for you if you're looking to buy or sell.  
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Construction Delays Slowing Market Movement

From November to December 2025, Minnesota lost 9,900 construction jobs, by far the largest single-month drop in the country. This trend continued into early 2026 and coincided with the arrival of “Operation Metro Surge,” a federal immigration enforcement effort that brought thousands of ICE agents into the state. At its peak, 3,000 agents were active, showing up at homes, schools and workplaces across the Twin Cities, including construction jobsites from Minneapolis and St. Paul to the suburbs of Shakopee, Chanhassen, Lakeville, Cottage Grove and Plymouth.

According to the National Association of Home Builders, immigrants make up a quarter of the construction industry’s workforce. The share is even higher among skilled tradesmen (roofers, drywall hangers, carpet and floor installers, stucco masons, etc.) at 32.5%. So it’s no surprise that as more immigrant workers stay home amid reports of increased jobsite visits, racial profiling and targeting by federal agents regardless of legal status, projects are slowing down and builders are falling behind schedule. 

This means that homeowners who planned to list their property once their new-build home was complete are waiting longer than expected, and that ripple effect is moving throughout the entire market. 
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The Ripple Effect on Minnesota's Housing Supply

When construction slows, timing shifts across the entire industry. And in real estate, timing is everything. It's even more important than "location, location, location." Ask any seasoned Realtor like Sheri Wessel, and they'll tell you that even the most desirable home in the most sought-after neighborhood can stall out when the timing is off.

Here’s how the current slowdown plays out: A delayed crew doesn’t complete roofing or drywall projects on schedule. This pushes back inspections, and delayed inspections lead to later closing dates. If a buyer can’t close on their new home, they can’t list their current one, so the next buyer has fewer options. Multiply that scenario across dozens of projects, and you begin to understand why inventory isn't recovering the way many expected it to heading into 2026.

The data reflects it. Pending home sales in the Twin Cities fell nearly 19% in January compared to the same time last year, more than 10 times the national decline. New listings also fell year over year. In the $250,000 to $500,000 range (the heart of the Twin Cities market), home showings were down 24% in early 2026, while inventory stayed essentially flat. 

For buyers and sellers trying to make decisions in this environment, here's what the current picture actually means for you.
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What This Means If You're Buying Right Now

For buyers, the current environment calls for patience and preparation in equal measure.

If you're looking at new construction, expect longer timelines and get specific commitments in writing before you sign anything. Understand your builder's policy if the closing date slips. Can you stay in your current home? What are the financial implications if you've already given notice on a rental? These are conversations to have before you're under contract, not after.

On the existing home side, the picture is more nuanced. Reduced buyer activity has created breathing room that simply didn't exist during the peak competition years. Homes are still selling, but the frenzied multiple-offer situations that defined 2021 and 2022 have largely faded. Mortgage rates have also stabilized in the 6% range after several years of volatility. Not the historic lows of 2020, but better than the near-8% peaks of late 2023. Buyers who were priced out a year or two ago may find the math working in their favor now, particularly if they're willing to consider homes that have been sitting on the market slightly longer than usual.

The buyers who will be best positioned right now are those who do their homework before they start shopping: know your financing, understand your flexibility, and work with an agent who has current relationships with builders and a real-time read on inventory in your target area.
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What This Means If You're Selling Right Now

For sellers, the most important variable right now is whether your sale is tied to a new construction purchase, because the risk profile looks very different depending on the answer.

If you're planning to sell your current home in order to move into a new build, have a direct conversation with your builder before you list. Understand where the progress actually stands, not just the original projected timeline. A good agent can help you structure a contingency that protects you if construction runs long, but that protection has to be built into the deal from the beginning, not negotiated after the fact when you're already committed.

If your sale isn't tied to new construction, say if you're downsizing, relocating, retiring or moving into an existing home, reduced buyer activity means pricing and presentation matter more than they did two years ago. That being said, well-priced homes in desirable areas are still moving, and sellers who are realistic about current values and work with an agent who understands what buyers are actually doing (not just what the headlines suggest) are still getting strong outcomes.

One thing worth keeping in mind: Minnesota's housing fundamentals remain sound. The median home price statewide is holding around $355,000, and the market is not in crash territory by any serious analyst's measure. What's happening right now is disruption layered on top of an otherwise stable foundation. The sellers who will struggle are those who try to time the market perfectly or who overprice based on peak-pandemic comparables that no longer apply.
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Have Questions About the Market? Let's Talk

If you're trying to figure out what all of this means for your specific situation, we're here to help. At Golden Homes Group MN, we live and work in this community, and we're watching these developments closely so our clients don't have to navigate them alone. 

Get in touch today for a free, no-pressure conversation with Sheri Wessel or Melany Thelander. Whether you're ready to move now or just starting to think through your options, we'll give you a clear, honest picture of where things stand.

Sheri Wessel
Office: 651-379-5252
Mobile: 651-270-7157
Email: [email protected]    

Melany Thelander
Office: 651-379-5252
Mobile: 651-500-8789​
Email: [email protected] ​