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Detroit Housing Market Enters New Phase

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  Published in House and Home on Wednesday, January 14th 2026 at 10:50 GMT by Detroit News

Detroit, MI - January 14, 2026 - The Detroit-area housing market is entering a new phase, marking a significant shift from the rapid growth experienced in recent years. While a dramatic crash isn't anticipated, the relentless boom of the past has subsided, with December 2025 sales showing a slight cooling trend. Data released today by the Michigan Association of Realtors paints a picture of a market in transition, characterized by cooling sales, persistent high prices, and chronically low inventory.

December Sales Dip, But Annual Growth Remains Positive

December 2025 witnessed a nearly 5% decrease in home sales compared to December 2024. This slowdown concludes a period of sustained and often explosive sales growth. However, zooming out to the annual perspective reveals a slightly different story. Total sales for 2025 were up 1.2% from 2024, totaling 85,148 transactions. This reflects the underlying strength of the Detroit-area housing market, even as immediate trends suggest a moderation.

"We're seeing a bit of a transition in the market," observed Steve Tregea, a broker with The Blanchard Group, succinctly summarizing the current climate.

Prices Stay High Amidst Cooling Sales

Despite the sales slowdown, home prices remain stubbornly high. The median home price reached $249,900 in 2025, demonstrating the sustained demand and limited supply that continues to push prices upward. This level of median price underscores the ongoing affordability challenges facing potential homebuyers in the region.

Inventory Remains the Key Constraint

The primary culprit behind the high prices isn't a sudden decline in demand, but a persistent and severe shortage of homes for sale. The number of homes listed for sale in December 2025 was 16,998. While this represents a slight increase compared to the previous year, it remains significantly below pre-pandemic levels, severely limiting buyer choice and exacerbating competition.

This scarcity fuels a competitive buying environment where multiple offers are still common, even though bidding wars aren't as frenzied as they were during the peak of the boom.

Mortgage Rate Fluctuations Influence Buyer Behavior

Mortgage rates have played a key role in shaping the current market dynamics. After reaching a peak of 8% in 2025, rates have retreated to approximately 6%. This drop in rates has offered a degree of relief for potential buyers and has prompted some to re-enter the market. However, affordability remains a significant hurdle, particularly for first-time homebuyers. While lower rates are a positive sign, the high home prices still present a considerable barrier to entry.

Expert Outlook: Moderation, Not Collapse

Real estate professionals are cautiously optimistic about the market's future. "We're not expecting a crash," emphasized Emily Martin, a realtor with Keller Williams, reflecting a common sentiment among industry experts. "The market is moderating, and we'll likely see sales continue to cool in 2026, but prices aren't going to plummet. Demand is still there."

Factors Supporting Continued Demand

Several underlying factors are expected to maintain robust demand in the Detroit-area housing market. These include ongoing population growth within the region, the continued limited housing supply, and the enduring aspiration of homeownership. These factors work in concert to sustain the desire for homeownership, even as economic conditions shift.

Advice for Potential Homebuyers

Despite the market moderation, the Detroit-area housing market remains competitive. Buyers who are serious about purchasing a home should be prepared to act decisively. This means getting pre-approved for a mortgage, being ready to make quick offers, and potentially offering above the asking price, particularly in desirable neighborhoods with limited inventory.