What Is Happening With Michigan Real Estate? | Michigan's Housing Market
- Andrew McManamon
- Jul 17
- 12 min read
What if I told you that Michigan’s housing market in 2025 has more plot twists than a Detroit Lions season? Despite mortgage rates soaring to levels we haven’t seen in years, home prices in Michigan are still trending upward, and more sellers are putting homes on the market. It’s a balancing act that has buyers, sellers, and even us realtors a bit wide-eyed. I’m going to tackle what’s really happening in Michigan real estate. Whether you’re a first-time buyer hunting for that affordable gem or a homeowner wondering if now’s the time to sell, Grab a Faygo and a coney dog and let’s get to it shall we.
Read This Before Buying A Home in Michigan
To begin with a snapshot, the median home price in Michigan is sitting in the mid-$200,000s. Earlier in 2025, it hovered around $246,400, which marked an 8.3% increase from the year prior. Fast forward to July, and we’re estimating a statewide median closer to $270,000, reflecting a continued, albeit slower, climb of about 4–5% compared to 2024. Inventory is showing signs of life as well. The number of homes on the market has grown by roughly 7–17% year-over-year, depending on the region. For instance, May 2025 saw about 36,300 homes for sale across Michigan, up nearly 8% from the same time last year. New listings are arriving, and yes, those "For Sale" signs are returning to lawns, though the overall supply is still relatively tight by historical standards. Renters are feeling the squeeze too, with rental prices in cities like Grand Rapids and Ann Arbor rising roughly 6–8% year-over-year, putting pressure on those sitting on the fence about whether to buy or continue renting.
Michigan Housing Supply
With roughly 3 to 5 months of housing supply in many areas, Michigan is inching closer to a balanced market. While it's still technically a seller's market, the edge isn't as sharp as it once was. Buyers are finding a bit more breathing room. Homes aren't flying off the shelves anymore, either. The median time on market sits around 47 days, a notable change from the blink-and-you-miss-it era of 2021. Mortgage rates, meanwhile, continue to apply pressure. The current 30-year fixed rate hovers around 6.5% to 7.0%, which, if you haven't checked in a while, might make your jaw drop. That's more than double what buyers were enjoying in 2021, and it's directly affecting affordability and the size of the mortgage many can qualify for.
Drilling deeper into home prices, we find they’re still climbing, just not at the meteoric pace we saw during the pandemic years. Statewide, we’re seeing mid-single-digit percentage increases year-over-year. Michigan's median price remains comfortably below the national average, which has made it a magnet for out-of-state buyers and a beacon of relative affordability. Southeast Michigan, including Metro Detroit, has been on a steady upswing. Home values in this region rose about 6% in 2024 and 8% the year before. Median prices across Wayne, Oakland, and Macomb counties jumped over 10% in 2024 alone, and Detroit proper saw a whopping 18.1% increase, bringing the city’s median price up to $94,500.
Some sellers are still pricing their 1970s time capsules like they're waterfront in Harbor Springs—spoiler alert: they’re not.
Other parts of the state reflect a similar yet nuanced story. Grand Rapids, for instance, appears to be stabilizing. The median listing price in early 2025 was slightly below that of the previous year, suggesting a mild cooling. Nearby areas like Holland and Muskegon, however, continue to post modest gains, buoyed by job growth and lifestyle appeal. In Northern Michigan, particularly the Traverse City area and lakefront markets, prices skyrocketed during the pandemic and have since tempered, though they still show healthy appreciation. Waterfront properties have jumped 77% since 2020, with non-waterfront homes up about 51% over the same period. Meanwhile, in Southwest Michigan, prices surged 17% year-over-year as of April 2025, a reflection of fewer sales but higher-end transactions skewing the median. So let’s recap: Metro Detroit’s still climbing fast, Grand Rapids is finding its level, Northern Michigan’s cooling off from red-hot lakefront growth, and Southwest Michigan’s catching fire. It’s a mixed bag out there—but the trend lines are up.
Buying A Second Home In Michigan
Let’s not forget the investors and second-home shoppers tuning in—yep, I see you eyeing that fixer-upper in Petoskey. Vacation home hotspots like Traverse City and Harbor Springs aren’t the frothy gold mines they were in 2021, but demand is still strong. The difference? You can actually negotiate now. The bidding wars may have calmed down, but the long-term value in those areas remains high, especially for those looking to lock in a second property before prices creep higher again. Inventory levels, while still not where we want them, are trending upward. Active listings have grown 13–17% in some areas, including Southeast and Northern Michigan. In Southwest Michigan, for example, inventory in April was up 23% compared to the previous year. This influx has pushed Michigan’s months of housing supply closer to 3 or 4 in many places, with some regions like the southwest even hitting 5 months – the healthiest they’ve been in years. Why are more homes hitting the market? Well, high prices are tempting sellers to cash in their equity. Builders are ramping up, albeit cautiously, and Baby Boomers are finally starting to downsize, freeing up family homes.
That said, many homeowners remain locked into their sweet 2.8% mortgage rates and are hesitant to trade up to a 7% loan, which is keeping a lid on how fast inventory can grow. In 2024, statewide building permits were still roughly 30% below their pre-2008 average, which means construction alone won't fix the inventory crunch overnight. While more homes are coming to market, they’re not selling quite as fast. With a median days-on-market at 47, homes are sitting a bit longer, and more sellers are adjusting their prices to meet today’s more discerning buyers. Roughly 22–25% of homes for sale in Michigan had to cut their asking prices in late 2024, a trend that appears to be continuing. However, about the same percentage of homes are still selling over list price, especially those that are move-in ready and located in high-demand areas. The takeaway? Buyers are becoming choosier, and sellers must present their homes well and price them competitively to stand out.
Mortgage Rates In Michigan
Now, let’s talk about the elephant in the room: mortgage rates. The current 6.5% to 7.0% average on a 30-year fixed mortgage is a big jump from the sub-3% era, and it has real consequences. The monthly payment on a $300,000 mortgage at today’s rate is roughly 50% higher than it was just a few years ago. Naturally, that has priced some buyers out and forced others to adjust their expectations. Yet despite these hurdles, demand remains relatively strong. Many buyers are adopting a "marry the house, date the rate" mentality, buying now with plans to refinance when rates (hopefully) drop. Experts like Lawrence Yun, Chief Economist of the NAR, anticipate rates stabilizing in the 5.5% to 6.5% range within the next year. Fannie Mae echoes that prediction, suggesting rates could land around 6.5% by the end of 2025. The affordability crunch is very real, particularly for first-time buyers who don’t have equity to roll into a new purchase. Metro Detroit, for example, has been flagged as one of the more overpriced markets relative to local income, with homes about 40% above historical value trends.
Buying A Home In Michigan
This makes buying more difficult even in relatively affordable markets. Still, creative financing strategies are helping. Buyers are exploring adjustable-rate mortgages, seller concessions, rate buydowns, and down payment assistance programs to make homeownership viable. Builders are offering incentives, too, including paid closing costs or temporary rate buy-downs on new builds. And hey, if you’re a first-time buyer right now feeling discouraged by high rates and climbing prices—I hear you. It’s tough out there. But I’ve helped buyers in this exact market find homes they love without giving up their life savings. There are options—we just have to get creative together. Stepping back to look at the broader economic landscape, Michigan’s economy has been solid. Unemployment is low, wages are rising, and the auto industry – a key economic driver – remains profitable, with EV production expanding. Inflation, while still elevated, has cooled from its 2022 highs, reducing some upward pressure on mortgage rates. Globally, there’s still uncertainty, from wars to supply chain concerns, but Michigan’s housing market has proven resilient.
The post-pandemic remote work trend is continuing to influence housing demand, with more buyers seeking homes with home offices or extra space, especially in scenic or smaller towns. Migration trends are favorable, too, with Metro Detroit seeing population increases for the first time in decades, which only fuels demand. Buyers in this market are finally seeing more opportunities. Inventory is up, competition is calmer, and there's more room to negotiate. You can keep your contingencies, ask for repairs, and maybe even snag a price reduction. But homes that are move-in ready and priced right still go fast. Be decisive, get pre-approved, and be ready to pounce when the right one pops up. Don’t forget to widen your search radius, consider new construction, or look at properties needing a little TLC to find more value. Also, if you’re torn between renting and buying, remember this: your landlord's mortgage is getting paid either way – just maybe not by them.
Selling A Home In Michigan
For sellers, you’re still in a solid position, but the strategy matters more than ever. Price your home right from the start and prepare it well – clean, stage, and fix the small stuff. Today’s buyers expect more. You’ll also need to be flexible. Many buyers are asking for concessions, contingencies, and repairs, and deals may take a bit longer to finalize. But if you’re realistic and market-savvy, you can still secure a great sale. Your home has likely appreciated substantially over the past few years, and now may be the right time to capitalize on that equity, especially if you're moving to a less expensive area or downsizing. If you’re trading up, talk to your lender or realtor about options like rate buydowns or longer close timelines to make the jump less financially painful. Looking ahead, the consensus among experts is that Michigan's market will continue its slow and steady growth. Prices are expected to rise 2–5% over the next year, depending on location. Sales volume should rebound as buyers adapt to current rates and gain confidence in the market. Mortgage rates may ease slightly, and more inventory is expected to enter the market as homeowners adjust to this new normal. It won’t be a buyer's market overnight, but the scales are slowly tipping toward balance. All in all, Michigan's housing market in July 2025 is resilient, reasonably competitive, and full of opportunity – if you know where to look.
So whether you’re buying, selling, or just Zillow-scrolling at midnight for fun (we’ve all been there), now you have the facts, the forecasts, and a little local perspective to help guide your next move. And if you're serious about making a move, don’t go in blind—grab my free Michigan Relocation Guide or download my ‘How to Win a Bidding War in 2025’ checklist. These guides are packed with everything I give my clients to help them move smart and stress-free. I’ll drop the links below! If you’re wondering whether now is your moment to buy or sell—or you just want to strategize over what the next 6 months might bring—let’s chat. There’s no one-size-fits-all answer in this market, but I can help you make the right move, wherever you are on your Michigan journey.
What are your thoughts? Comment below!
Here’s the bottom line: Michigan real estate in 2025 isn’t crashing, isn’t skyrocketing—it’s balancing. That means opportunity if you’re informed, realistic, and have the right person in your corner. Lucky for you, you already know a guy. And as always, if Michigan isn’t too strange, I help people move to, from, and within the state – and I love it. Reach out anytime.
Cheers,
Andrew
Andrew McManamon is a Michigan REALTOR® with Signature Sotheby’s International Realty and provides real estate services to Buyers, Sellers and Investors throughout SE Michigan including Livingston County, Oakland County, Washtenaw County, Genesee County & beyond. Andrew has become one of the pillars of Michigan real estate. Prior to his real estate career Andrew was responsible for managing a senior living facility in Brighton, Michigan as a dining supervisor and an activities assistant. Andrew’s passion to help people is unlike any other, and he continues to strive to be the best resource he can be. Andrew graduated from Cleary University in Howell, Michigan with a double major in business and marketing, and currently resides in Brighton, Michigan.
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Frequently Asked Questions About Michigan’s 2025 Housing Market
📍 1. What is the average home price in Michigan in 2025?
As of mid-2025, the median home price in Michigan is estimated to be around $270,000, up from about $246,400 earlier in the year. That’s a year-over-year increase of 4–5%, reflecting a continued but more modest rise in prices compared to the wild pandemic-era gains.
📍 2. Are home prices still rising in Metro Detroit?
Yes, Metro Detroit home prices continue to climb. In 2024, prices in Wayne, Oakland, and Macomb counties jumped more than 10%, and Detroit proper saw an 18.1% surge, bringing its median price to $94,500. While appreciation has slowed a bit in 2025, values are still trending upward.
📍 3. Is it a buyer’s or seller’s market in Michigan right now?
Michigan is inching toward a more balanced housing market, with 3–5 months of inventory in many areas. However, it’s still technically a seller’s market, just not as aggressive as it was in 2021–2022. Buyers have more room to negotiate, but move-in-ready homes in desirable areas still sell fast.
📍 4. What’s the current mortgage rate in Michigan?
In July 2025, 30-year fixed mortgage rates in Michigan hover between 6.5% and 7.0%. That’s more than double the sub-3% rates from just a few years ago, significantly affecting buyer affordability and monthly payments.
📍 5. Where are home prices rising fastest in Michigan?
In 2024, some of the fastest-growing areas included:
Detroit (+18.1%)
Southwest Michigan (+17%)
Oakland & Wayne Counties (+10%+)
Meanwhile, Grand Rapids is stabilizing, and Northern Michigan lakefront properties are seeing slower growth after pandemic-era booms.
📍 6. How long are homes sitting on the market in Michigan?
The median days on market statewide is currently around 47 days. That’s a notable increase from the ultra-fast pace of 2021, giving buyers more breathing room. That said, homes that are priced well and move-in ready can still sell quickly.
📍 7. Are sellers having to drop their prices in Michigan?
Yes — in late 2024 and into 2025, about 22–25% of Michigan sellers had to reduce their asking prices. This trend continues in many areas, especially for homes that are outdated, overpriced, or not staged properly.
📍 8. Why is inventory rising in Michigan right now?
Inventory is increasing due to several factors:
High prices are tempting more homeowners to sell
Builders are cautiously adding more new construction
Boomers are downsizing
However, many homeowners remain "rate-locked" into 2.8% mortgages, limiting how much inventory can truly flood the market.
📍 9. Are Michigan homes overpriced in 2025?
Certain parts of the state—especially Metro Detroit—have been flagged as overpriced relative to local income, with prices roughly 40% above historical value trends. Still, compared to national averages, Michigan remains one of the more affordable housing markets in the U.S.
📍 10. Is it cheaper to rent or buy in Michigan right now?
In many cities, rent is increasing at 6–8% year-over-year, including places like Ann Arbor and Grand Rapids. With interest rates higher, buying might seem more expensive month-to-month—but owning builds equity and locks in your payment. Whether buying is better depends on your location, budget, and how long you plan to stay.
📍 11. What’s happening in the Traverse City and Northern Michigan housing markets?
Northern Michigan, especially lakefront areas like Traverse City and Harbor Springs, saw explosive growth during the pandemic. Prices are still high but have leveled off in 2025. Waterfront homes are up 77% since 2020, while non-lakefront properties have risen about 51%.
📍 12. Are bidding wars still happening in Michigan?
Bidding wars aren’t as common as they were in 2021–2022, but roughly 22–25% of homes in desirable, move-in-ready condition are still selling above asking price. Pricing, condition, and location are key.
📍 13. What financing strategies are buyers using in Michigan right now?
Buyers are getting creative in 2025:
Adjustable-rate mortgages (ARMs)
Rate buydowns
Down payment assistance programs
Seller concessions
Some builders are offering incentives like temporary rate reductions or closing cost assistance to help buyers stretch their budgets.
📍 14. Is now a good time to buy a home in Michigan?
If you’re financially ready and buying for the long term, now can be a smart time to buy. You’ll face less competition, have more room to negotiate, and potentially refinance your rate later. Just make sure to work with a local expert (hi, that’s me) who can help you navigate this nuanced market.
📍 15. Is it a good time to sell a home in Michigan?
Yes — but strategy matters more than ever. Homes that are clean, updated, and priced competitively are still selling well. But you may need to offer concessions or be flexible on terms. The key is understanding what buyers expect in today’s market.
📍 16. How do interest rates affect how much home I can afford in Michigan?
A jump from 3% to 7% increases the monthly payment on a $300K home by about 50%. That’s causing many buyers to lower their price range or explore alternative financing. It’s more important than ever to get pre-approved and explore all your options.
📍 17. Are second homes still a good investment in Michigan?
Vacation markets like Petoskey, Traverse City, and Harbor Springs are no longer gold-rush zones, but they remain high-demand long-term investments, especially with more buyers prioritizing remote work and lifestyle. You won’t always get bidding wars, but you can actually negotiate now.
📍 18. Will Michigan home prices drop in 2025?
No major drop is expected. Most experts forecast a 2–5% increase in home prices over the next year, depending on location. The market is stabilizing, not crashing.
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