Report: Michigan home sale prices, home construction permits may reflect effects of inflation and other economic factors
A new report suggests the pandemic home sale boom may be slowing in Michigan.
The report is from ATTOM, a company that tracks the housing industry.
According to the ATTOM report, in the first three months of 2022, profit margins on median-priced single-family home sales across the United States recorded the first quarterly decline since late 2019, and the largest decline in a decade.
“Home prices simply can’t continue to go up as rapidly as they have for the past few years,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “The combination of higher prices, rising mortgage rates, and the highest rates of inflation in 40 years may be pricing some prospective buyers out of the market.”
Conditions in Michigan housing markets appear to be reflecting national trends.
In the first quarter of the year, home sales in Kalamazoo (-10.9%) and Detroit (-10%) posted median price decreases.
Meanwhile, cash is still king in several Michigan housing markets.
All cash sales accounted for more than 60% of home sales in Flint (61.8% of all sales) and Detroit (61.5%) and 53% in Ann Arbor in the first quarter of 20-22.
Nationally, cash sales made up 34.2% of all single-family home sales in the first quarter of 2022, the highest level since the first quarter of 2015.
Michigan home builders are blaming rising interest rates and ongoing supply chain problems for a slump in new home construction.
For example, just under 400 permits were issued last month across Wayne, Macomb, Saint Clair, and Oakland counties. That’s down by more than a hundred from the same time last year in that four-county region.
"When you look at where we should be historically, as well as just with population growth, we probably should be building about as twice as many homes as we are building,” said Forrest Wall, CEO of the Home Builders Association of Southeastern Michigan.
In Michigan and nationally, rising demand for rental housing is fueling an increase in construction of multi-family homes.