BISMARCK, September 11 — The story begins with a paradox on the North Dakota prairie. Construction crews are racing to build new neighbourhoods across Bismarck, yet the surge in building activity has done little to cool the cost of buying a home. Single-family building permits in the city skyrocketed 137% this June compared to the previous year, with contractors submitting more than 150 permits in an effort to replenish depleted housing inventory.
The numbers suggest a market responding to demand. The prices suggest something else entirely.
A Market That Won’t Cool
Despite the influx of new construction, the average home sale price remains high. In Bismarck, the average sale price for a single-family home recently climbed past $484,000 — up $18,000 from last year. That dynamic leaves first-time homebuyers caught in a tight spot, facing near half-million-dollar price tags and fierce competition for the few entry-level homes available.
At the heart of the problem is a simple imbalance. “While we have people who are aging into homeownership, we have far fewer people who are putting their house on the market,” said Dot Frank, a real estate agent with Better Homes and Gardens Real Estate.
Frank attributes this to the rates that were locked in during COVID. Shortly after the pandemic, rates dropped significantly to where you could finance a house for under 3%. “When it comes time to sell, naturally, they’re going to have to refinance.
The rate could be twice as high. So, no one wants to spend more money on a house and more money to finance the house, so people are tending to stay put a lot longer than they have in the past,” Frank said.
Sellers Under Pressure
Sellers are also navigating unusual pressures in the fast-moving market. “While sellers want their house to sell relatively quickly, if it sells too fast, then they start to worry that they have the house priced too low,” Frank said. New construction has helped fill the void left by unlisted existing homes, but high labour and material costs keep prices elevated.
Realtors advise prospective buyers in the Bismarck-Mandan area to be pre-approved and prepared to submit offers immediately once they find a property, as inventory remains exceptionally tight. For those involved, the coming months will show whether the building boom can outpace the lock-in effect — or whether Bismarck’s entry-level buyers will keep waiting.
