Michigans housing market underwent significant changes from 2018 through 2023.
Several factors fueled this surge.
At the same time, the supply of homes for sale remained extremely tight.
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Affordability became a serious concern for many Michigan buyers.
Despite the challenges, Michigans homeownership rate remained relatively high at around 7374% during 20182023.
That means roughly 3 in 4 Michigan households own their home, well above the ~66% U.S. average.
What Types of Homes Are Michiganders Buying?
Single-Family Dominance
For households under $250k income, single-family houses are by far the top choice.
The preference for single-family homes grew even stronger during the pandemic.
In 2019 (pre-COVID), about 7578% of Michigan home sales were single-family.
These attached units made up roughly 1020% of purchases in recent years.
For example, a condo might sell for $180,000 in a market where single-family homes average $250,000.
Manufactured Homes
Manufactured homes (mobile homes) are another option for budget-conscious buyers in Michigan.
Michigans rural and small-town buyers sometimes choose double-wide manufactured houses as an affordable path to homeownership.
Upsizing vs.
However, a striking trend in recent years has been that fewer Boomers are downsizing than expected.
This means fewer starter and mid-sized homes being freed up for younger buyers, adding to the inventory crunch.
By 2023, as offices reopened, this rural migration boom waned.
Affordability-Driven Moves
Within-state moves were often driven by affordability.
Some households relocated from higher-cost counties to lower-cost ones.
Michigan was a hotspot for this boom, ranking among the top states for vacation-home demand in 20202021.
Small vacation-friendly cities like Sturgis, MI saw second-home purchases increase over 20% in that time.
However, by 20222023 the second-home trend cooled.
Higher interest rates and economic uncertainty hit luxury and discretionary purchases first.
Michigan realtors reported a decline in second-home sales in 2023.
Desirable communities in Oakland County (Birmingham, Troy, Novi, etc.)
and parts of Macomb became quite competitive.
Middle-class families earning under $250k found that some inner-ring suburbs were increasingly out of reach as prices climbed.
During 20182023, Ann Arbors demand stayed high thanks to stable university and tech jobs.
According to local experts, housing metrics in West Michigan outperformed the rest of the state.
Middle-income buyers in Grand Rapids often had to act fast and bid above asking to win a home.
These areas experienced a blend of residential and second-home dynamics.
During 20202021, places like Saugatuck or South Haven had a frenzy of second-home buying.
Kalamazoo and Southwest: The Kalamazoo area also had a solid run.
Kalamazoos affordable market attracted first-time buyers and saw relatively steady growth.
Notably, Battle Creek (Calhoun Co.) recorded a 20.5% price increase year-over-year by mid-2023.
Upper Peninsula (U.P.
): The U.P.
is relatively sparsely populated and traditionally has lower home prices and slower market movement.
During 20182023, the U.P.
saw mild growth some remote work relocations and retirees moved in, but overall demand is lower than downstate.
counties are under $150k.
These areas did not see the same frenzy as Grand Rapids or Detroits suburbs.
Prices crept up but from very low bases.
This indicates that, statewide, renting was somewhat more affordable relative to incomes than the national norm.
Even so, many Michigan renters are cost-burdened.
For lower-income renters, this percentage is higher.
For households under $250k income, the decision to rent or buy became a tough calculus.
20182023 vs. 20082017: How Do the Trends Differ?
Home prices had plummeted from mid-2000s highs.
From 2008 through about 2012, Michigans median home prices were depressed.
By contrast, 20182023 was a period of price expansion to record highs.
One reason is new construction dried up after 2008 and never fully returned.
The average number of building permits in 20162020 was less than half the average from 19862006.
From 2008 to 2016, many Michigan families lost homes to foreclosure or became renters.
Homeownership in Michigan dropped from about 75.9% in 2008 to ~72.8% by 2016.
Conclusion
Michigans 20182023 housing trends differ greatly from 20082017.
