Home prices in the Rochester area are hitting peaks not seen in years, driven by strong employment and continued low interest rates.

The median sale price hit $167,000 in June, up 7.7 percent from a year ago and the highest it’s been since the Southeast Minnesota Association of Realtors began using its current reporting system in 2005. The median price for the first half of the year was $155,000, up 9.2 percent from a year ago.

“The market is really strong,” said Karen Becker, CEO of the Realtor group, which covers 11 counties in the southeast corner of the state. “It’s been consistently good in our area primarily because of the employment situation.”

The state has added 41,602 jobs since June 2014, according to the Minnesota Department of Employment and Economic Development (DEED). Rochester saw a big bump in the number of jobs in the last month, said Cameron Macht, regional analysis and outreach manager for DEED. Job growth for Rochester grew 1.4 percent between May and June 2015.

The $6 billion redesign of downtown Rochester for the Destination Medical Center is expected to draw more home buyers and job seekers to the region as the center creates about 30,000 jobs and billions in new tax revenue. The Mayo Clinic already employs more than 34,000 people in the city, which has a population of about 110,742.

The medical center has already pushed up commercial real estate prices, as investors from around the world are betting on the Mayo Clinic’s massive expansion. The clinic has pledged to bring in $2 billon in private investments to shape the city into a destination with new shops, restaurants and hotels to entice medical professionals to the area.

Christopher Galler, CEO of Minnesota Association of Realtors, expects DMC will continue to push up home prices as well in the Rochester area.

“There is so much development that’s going to occur with the medical center,” he said.

The southeast median sale prices are higher than the state. According to the state’s June report, Minnesota saw a 7 percent increase in median sale prices. Affordability is going down for the whole state, Galler said.

In southeast Minnesota, homes sold more quickly, even as prices rose. Homes were on the market an average 77 days in June, down 13.5 percent from a year ago. There were 773 closed sales during the month, up nearly 19 percent from last June. Another 589 sales were pending.

New listings fell 6.9 percent to 755. Inventory levels fell 19 percent to 2,158 homes for sale. That leaves the area with 4.3 months’ supply, compared with 6.1 months a year ago.

“Financing is available and affordable,” Becker said. “This is a great time whether you are a buyer or seller.”

Rochester real estate agent Lori Mickelson said when she is selling houses under $250,000, she has two buyers for every seller. She said there is a shortage of homes on the market.

“Most sellers are getting close to their asking price if not over the asking price for their homes,” Mickelson said.