Before buying a house, you must pay attention to the housing market to determine the best time and location in which to buy. If you're looking at homes in Michigan, now is the time to reflect on the major trends that occurred in 2025 and see what 2026 has in store.
Overall, prices rose slightly in 2025, and home sales were flat across the state, with new home sales increasing only 1% or 2% depending on the region.
As 2026 gets underway, the big question is whether home sales will continue their lackluster pace as home prices continue to increase. Nonetheless, it's clear that higher home prices are here to stay—for a while, at least. Curious to know more? Keep reading for the latest insights!
Trends from Michigan's 2025 Real Estate Market
When looking at the Michigan housing market in 2025, three major trends stand out. First, home prices were up across the board, and about a fourth of houses sold above market price. Second, home sales fluctuated depending on the season, but not by much. For example, November saw a decrease by 8% in home sales from November 2024. Finally, some areas saw considerable growth while others went down. Let's break each trend down into more detail.
Higher Housing Prices
In 2025, the median home price in Michigan was $271,700, which was a 3.4% increase from 2024. Additionally, about 26.2 percent of homes sold in 2025 were above market price.
Overall, Michigan housing is pricier than ever, but demand is high enough that buyers are willing to pay more than necessary to secure a property. The median time a house spent listed for sale was 19 days.
Shifting Demographics
The top five cities with the fastest-growing home sale price in 2025 were:
- Bay City 34.4%
- Burton 25%
- Wyandotte 23.7%
Higher prices are often a result of high demand and limited supply, leading to bidding wars and stiff competition. However, the most competitive cities in Michigan in 2025 were:
- Wyoming
- Comstock Park
- Belding
- Huntington Woods
- Grandville
Overall, many new homebuyers in Michigan were searching for places in smaller towns and rural areas. Part of this could be that housing inventory is better in these towns or that the appeal of small-town living is worth paying higher prices for.
Price Trends Analysis
Throughout the state, the median home price in Michigan is around $251,876, with the median sales prices at around $263,925. However, different parts of the state vary wildly.
For example, in Kalamazoo, the average home price was $229,988 in November 2025, marking a 3.1% increase from 2024. However, what's even more remarkable is that the median price was close to $250,000 in June 2023, illustrating how volatile the market can be.
In Grand Rapids, the median home listing price was $300,000 in October 2025, which is lower than the $325,000 price of January 2025.
Overall, the Upper Peninsula is seeing an upward trend. For example, in Iron County (next to Wisconsin), median home prices in October 2025 were around $181,250, which is well above early 2024 median home prices for the area.
Impact of Economic Factors
According to WalletHub, the areas with the hottest real estate markets in Michigan were:
- Grand Rapids
- Sterling Heights
- Ann Arbor
- Dearborn
- Lansing
Some of the main economic factors driving these markets include:
- Relatively Low Cost of Living - Grand Rapids has a cost of living about 5.5 percent lower than the national average.
- Higher Quality of Life - Cities like Grand Rapids and Dearborn are developing quickly but without the downsides of living in a major metropolitan area. Residents have access to various amenities and attractions, but they don't have to worry as much about heavy traffic or high crime rates.
- Job Opportunities - New development means new opportunities for jobs. While Grand Rapids doesn't have as much growth as other similar-sized cities, places like Dearborn are adding more jobs and growing at a steady pace.
Diverse Trends Across Michigan
As we've mentioned, different parts of Michigan are experiencing unique trends (both up and down), so it’s crucial to look at specific areas when comparing real estate in Michigan. Here's a detailed look at four cities: Detroit, Grand Rapids, Kalamazoo, and Traverse City.
Detroit
- Median Home Price - $95,000
- Number of Homes for Sale - Roughly 3,900
- Buyer's or Seller's Market? - Buyer's
Grand Rapids
- Median Home Price - $300,000
- Number of Homes for Sale - Roughly 1,000
- Buyer's or Seller's Market - Buyer's
Kalamazoo
- Median Home Price - $235,450
- Number of Homes for Sale - Roughly 685
- Buyer's or Seller's Market - Buyer's
Traverse City
- Median Home Price - $425,000
- Number of Homes for Sale - Roughly 679
- Buyer's or Seller's Market - Seller's
Buyers and Sellers in Michigan's Housing Market
As you can see, Michigan's real estate market is somewhat volatile and competitive, so you have to plan accordingly as a buyer or seller. Just because the market is favorable to one side or the other right now doesn't mean that won't change in the future. So, here are some top tips on how to navigate Michigan real estate on either side of the equation.
For Buyers:
- Buy Now, Refinance Later - Yes, mortgage interest rates are high right now, but they're trending down. When that happens, you may have the opportunity to refinance your mortgage and save money on your monthly payment. Overall, if you're ready to buy now, it's smarter to go this route than to wait. Once rates go down, more people will enter the market.
- Get Pre-Approved - If you have a preapproval letter from a mortgage lender, you may have a better chance of your offer being accepted. Alternatively, if you have to wait for pre-approval once you find a place, it might get sold in the interim.
- Buy a New Construction Home - Buying a house from a builder or developer is much easier than negotiating for a pre-owned home. The price is typically fixed, and you don't have to worry as much about upkeep and maintenance for a few years.
- Get a Bigger Down Payment - The more you can pay upfront for your house, the easier it is to close the deal.
For Sellers:
- Price High, Negotiate Down - If you're in a seller's market, you should consider listing your home for around 10 percent higher than the market price. However, use this as a negotiating tactic; don't assume you can sell it for that much. But this way, you have a buffer when working with buyers.
- Make Your Home Move-In Ready - The more work that needs to be done on your home, the harder it can be to spark a bidding war. However, if your house is clean, well-kept, and ready for residents immediately, demand will be much higher.
- Don't Pay Too Much for Fees - These days, it's never been easier to list your home, and some agents or sites only charge a one-percent commission fee. However, having a dedicated agent can help you sell quicker or for more money, so there's a bit of a trade-off.
- Don't Wait Too Long - The housing market ebbs and flows, so things can change rapidly. In general, summer is the best season to sell because demand is higher. However, if you wait too long, you might wind up on a downward trend, forcing you to sell for less than you may want (or take your home off the market for a while).
The Future of Michigan Real Estate
People are moving to Michigan and clamoring for houses. As a result, because new construction is slow to keep pace, prices will likely keep rising in 2026 and beyond. That said, if the elderly population starts downsizing, homebuyers may see a steady influx of pre-owned homes hitting the market.
Also, the location matters a lot. For example, the Upper Peninsula is relatively cheap, but it doesn't have as many big cities or amenities. Similarly, Detroit is pretty affordable, but some parts of the city are far less desirable than others. Realistically, areas like Grand Rapids will probably see growth, but it will take work for Detroit to reclaim its former glory.
The Bottom Line on Michigan’s Housing Market
Buying a house in Michigan is somewhat complex, but knowing the ins and outs of the market can help you make the smartest decision for your needs. Overall, as long as you're flexible with where you live and can wait for the right moment, you may be able to get the home of your dreams for less than you might expect.
Ready to start your search for a new home today? We’re here to help! Explore our wide selection of new construction homes for sale in some of Michigan’s most popular areas.
