|
Mortgage Rates Are Creeping above 7% Again. Here Is What That Means for Michigan Buyers
Freddie Mac's 30-year fixed average hit 6.95% in mid-September, up from 6.71% at the start of the month and roughly 6.50% a year ago. On a $400,000 Southeast Michigan home with 20% down, that is about $95 more per month in principal and interest. Not a disaster, but buyers are now doing math at the kitchen table instead of just falling in love with the kitchen.
Is It a Good Time to Buy in Michigan With Rates Above 7%?
For many buyers, yes, because higher rates are partly offset by choice. The MLS reported another five-year inventory high in Southeast Michigan in June, with homes on the market up more than 12% from a year earlier. More options means more room to negotiate, though it is not a free-for-all. BUT, this is not good on the other hand as it's hurting the affordability of buyers.
What the Data Says Buyers Are Doing
Buyers are not frozen, they are selective.
- Realcomp's CEO noted that three of every ten homes listed in June also sold in June.
- The August Reinhart and Real Estate One report describes a market split in two: 61% of July closings were at or above asking, while homes that miss on price or condition sit and collect price cuts.
- In Oakland County, where the June median sale price was $395,000, two homes a mile apart can have completely different leverage.
Builders Are Competing on the Monthly Payment
Nationally, new-home sales are at an eight-month high and near 2019 levels, while existing-home sales are about a million short of 2019, according to HousingWire's Logan Mohtashami. Realtor.com found that 18.8% of new builds advertise an incentive and 13.8% advertise reduced rates. Those are national numbers, but the same playbook shows up in Michigan new-construction communities. Resale sellers can often contribute toward a rate buydown or closing costs too, depending on the loan, so ask.
Why Fall and Winter Can Work in Your Favor
Spring brings the crowds and summer brings the school-year rush, then Michigan weather thins out buyer traffic. Sellers who list in October or November usually have a real reason to sell, and less competition plus motivated sellers tends to favor buyers. It is a pattern, not a guarantee, but waiting for spring is not automatically the smart move.
Do Not Forget Michigan Property Taxes
Taxes equal your taxable value multiplied by the millage rate. Under Proposal A, taxable value is capped while the owner stays put, rising by the lesser of 5% or inflation. After a sale, the cap comes off and taxable value resets to the state equalized value (roughly half of market value) the following year, so the seller's tax bill is not yours. Plan for the worst, hope for the best: budget with an uncapped number.
What to Do Next
If you are thinking about moving to Michigan, or moving up within it, I help people do exactly that, including running real numbers on your price range with taxes and incentives. Start with the Living in Michigan Guide.
| 
