State Mortgage Rate Drops in 2025: How ND & MN Compare to the Top 10 for FM Homebuyers

By Christopher Leigh | September 26, 2025, 09:00 AM CDT

Fargo-Moorhead’s housing market, with median prices at $384,100 and a balanced 2.8-month inventory, is getting a timely boost as mortgage rates fell in every state from Q1 to Q2 2025, per WalletHub’s latest report. Nationally, 30-year fixed rates averaged 6.3% (up slightly from 6.26% last week, per Freddie Mac), but state-level drops—double-digit in 40 states—offer relief, especially in the South and Midwest. North Dakota saw a 13.75% decrease (ranking 17th nationally, average ~5.5%), while Minnesota dropped 10.72% (34th, ~5.58%)—strong showings that outpace many coastal states and enhance affordability for FM first-timers in North Fargo’s urban gems or Dilworth’s family starters. As a licensed real estate broker with Vision Realty, I’m seeing these shifts unlock deals in our resilient metro. Let’s compare ND/MN to the top 10 and explore strategies for buyers and sellers.

Why State Mortgage Rate Drops Matter in Fargo-Moorhead

High national rates (6.3%) and $429,990 medians have sidelined buyers, but state variations create opportunities. WalletHub analyst Chip Lupo notes: “Lenders in lower-cost markets cut rates aggressively to spur activity.” In FM, where incomes average $78,500, a 0.5% drop saves $100 monthly on a $300,000 loan—$1,200 yearly. ND’s 13.75% Q1-Q2 plunge (to ~5.5%) ranks better than MN’s 10.72% (to ~5.58%), making Cass County homes more accessible than in high-rate states like New Jersey (6.85%, minimal drop).

These declines, concentrated in the South/Midwest, signal buyer relief in FM’s 15% YoY inventory rise, where 30% of buyers are first-timers (NAR 2025).

Top 10 States for Mortgage Rate Decreases: How ND & MN Stack Up

WalletHub’s Q1-Q2 2025 data ranks states by drop magnitude, with Southern/Midwest leaders benefiting from affordability. ND (17th, 13.75% drop) edges MN (34th, 10.72%), both double-digit but trailing top-10 Southern states with cheaper medians ($279K-$335K). FM’s $384,100 median is higher, but lower rates + Midwest pricing (22% below national) make it competitive.

Data: WalletHub 2025; FM Realtors for local medians.

ND/MN’s drops, while not top-10, outperform high-cost states like NJ (minimal drop, 6.85%) or CA (11.2%, ~6.2%). FM’s Midwest edge—22% below national medians—amplifies relief, with ND’s stronger decline favoring Cass County buyers.

The Bigger Picture: Affordability and FM’s Market

Rates above 6% and $429,990 national medians have curbed sales, but FM’s $384,100 (up 2% YoY) and 15% inventory rise provide breathing room. “Coastal states cut less aggressively,” Lupo says, as demand sustains high rates. In FM, 13.75% (ND) and 10.72% (MN) drops ease DTI ratios for first-timers, potentially boosting sales 5-10% in Q4 2025.

Strategies for FM Buyers and Sellers

Buyers:

1. Shop Local Lenders: ND’s drop to ~5.5% saves $100/month on $300K; pre-approve with Alerus Financial.

2. Target Midwest Value: FM’s $384K median (22% below national) + rate relief beats top-10 like NC ($419K).

3. Leverage Inventory: 15% rise in 58102 favors $300K starters.

4. Negotiate: 18% price cuts mean $5K concessions.

5. Plan for Q4: Rates may dip further, sparking 5% sales uptick.

Sellers:

1. Price Competitively: Align with $375K comps to avoid 60+ days.

2. Highlight Affordability: Emphasize FM’s lower rates vs. coastal highs.

3. Offer Buydowns: Match ND/MN drops with $5K credits.

4. Target First-Timers: 30% buyer share seeks value in Dilworth.

5. Monitor Trends: Q4 inventory surge favors quick sales.

Frequently Asked Questions

Q: How do ND/MN rate drops compare to top-10?
A: ND’s 13.75% (17th) nears Iowa’s 16.35%; MN’s 10.72% (34th) trails but beats CA’s 11.2%.

Q: Will FM prices fall with lower rates?
A: Unlikely—up 2% YoY to $384K; 15% inventory tempers spikes.

Q: Are FM rates below national?
A: Yes—~5.5-5.58% post-drop vs. 6.3% national, per WalletHub.

Q: How do drops aid FM first-timers?
A: $100/month savings on $300K; boosts 30% first-timer share.

Q: What’s FM’s edge over top-10 states?
A: Midwest affordability (22% below national) + solid drops make it competitive.

Conclusion

State mortgage rate drops in 2025—13.75% in ND, 10.72% in MN—offer FM buyers relief, outpacing coastal states and enhancing our market’s value. From North Fargo’s starters to Moorhead’s family homes, lower rates unlock affordability amid 15% inventory growth. Vision Realty’s broker expertise maximizes these trends—contact us to secure your FM homeownership win.

Contact Vision Realty
Phone: (701) 715-4747
Email: chris@visionrealty.us
Website: www.visionrealty.us
Serving Fargo, Moorhead, West Fargo, and beyond.

References

• WalletHub. (2025). States Where Mortgage Interest Rates Are Decreasing the Most. Retrieved from https://wallethub.com/edu/states-mortgage-interest-rates-change/141339

• Freddie Mac. (2025). Mortgage Rate Trends: Q3 2025. Retrieved from https://www.freddiemac.com/pmms

• Fargo-Moorhead Association of Realtors. (2025). Market Trends: Q3 2025. Retrieved from https://fargohomesearch.com/real-estate-market-trends-in-fargo-north-dakota-a-comprehensive-guide/

• National Association of Realtors. (2025). Profile of Home Buyers and Sellers. Retrieved from https://www.nar.realtor/research-and-statistics/research-reports/profile-of-home-buyers-and-sellers

• U.S. Census Bureau. (2024). Fargo-Moorhead Housing Data. Retrieved from https://www.census.gov/quickfacts/fact/table/fargocitynorthdakota/PST045223

Disclaimer

This article provides general real estate and economic insights and is not intended as legal or financial advice. All data is based on publicly available sources as of September 2025 and subject to change. Vision Realty complies with all Fair Housing laws, promoting equal opportunity without regard to race, color, religion, sex, disability, familial status, or national origin. Consult licensed professionals for transaction-specific guidance.