Twin Cities Housing: The Numbers Don’t Lie—We’re Still Playing Catch-Up

The Metropolitan Council just released the 2025 building permit figures—and once again, the Twin Cities isn’t producing enough housing.

Despite early optimism heading into 2025, the year brought continued uncertainty. Trade policy concerns, persistent inflation, and shifting interest rates (even with three cuts from the Federal Reserve last year) have kept both developers and consumers cautious. And as we know, consumer confidence remains one of the most reliable leading indicators for housing production.

While the Twin Cities is still considered more “affordable” than coastal markets, that relative advantage is fragile. Continued underproduction will inevitably impact affordability, as supply and demand remain fundamentally out of balance.

In 2025, local communities issued approximately 12,100 permitted units - the lowest level since 2015. For perspective, housing construction peaked in the early 2000s, slowed sharply during the Great Recession, and only began to recover meaningfully in 2018 & 2019. Activity surged during the pandemic housing boom, reaching 22,600 units in 2021, before pulling back again.

According to the Federal Reserve Bank of Minneapolis and the Itasca Project, the region needs at least 18,000 new units annually to meet demand. Since 2000, we’ve only reached that benchmark nine times, and five of those years occurred more than two decades ago.

The challenges are compounding - construction costs, labor constraints, interest rates, slow job growth, and now rising energy costs tied to global instability are all contributing to hesitation across the market. The result: delayed projects today that translate into deeper supply shortages tomorrow.

But here’s where I see the opportunity.
Real estate has always been a long game - and markets like this tend to reward those willing to stay active while others sit on the sidelines. The fundamentals in the Twin Cities haven’t gone away. If anything, they’ve been building beneath the surface. Demand doesn’t disappear; it waits.

What we’re seeing right now isn’t a lack of need—it’s a pause in confidence. And that creates a window for those thinking beyond the next 12 to 18 months. The next cycle will favor groups that are willing to plan, position, and move with intention today.

 At Bricks and Brand, we work across both the private and public sectors—supporting developers, cities, economic development teams, and real estate leaders who are navigating exactly this kind of market. Whether it's aligning vision, telling the story, or building momentum behind projects that matter, we help bridge the gap between what’s planned and what actually gets built.

 If you’re thinking about what comes next - for your project, your community, or your pipeline - I’d welcome the conversation.