7% mortgage rates don’t stop rising home prices in metro Detroit

The pain of 7% mortgage rates has done little this summer to slow rising home sale prices in metro Detroit.

The median sale price hit $285,000 in June for metro Detroit houses and condos, up 5.6% from a year earlier, according to data released Monday from the Realcomp multiple-listing service.

Even though home listings were up a modest 3%, the number of sales for the month was nevertheless down significantly — a 17% year-over year drop.

"If we see that number (listings) continue to rise, I believe that we’ll see the number of sales rise, and eventually we’ll see those prices steady off a little bit," Realcomp CEO Karen Kage said in an interview.

Realcomp defines the metro Detroit region as Oakland, Wayne, Macomb and Livingston counties. Its reports do not count all private sales that may have occurred in a month.

Metro Detroit real estate agents have for months reported that demand for housing continues to outpace supply of for-sale houses. One reason is that many homeowners who bought a house or refinanced their mortgage during the pandemic years are reluctant to move and give up their low-interest rate mortgages.

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"Despite inventory and affordability challenges, many buyers are actively searching and competing, driving home prices higher," Jeanette Schneider, president of RE/MAX of Southeastern Michigan, said in a statement. "Sellers who have priced their homes appropriately can expect early interest and significant showing activity. This dynamic is likely to persist until more listings become available."

There has been only a modest uptick in construction activity so far this year for new single-family houses in southeast Michigan, despite a call by Gov. Gretchen Whitmer earlier in the year to "build, baby, build" because "the rent is too damn high and we don’t have enough damn housing."

The average value of a new single-family home permit was up 10% year-over-year in May to $372,700, according to the Home Builders Association of Southeastern Michigan.

Those in the industry often add as much as 40% to permit values to get a sense for what such a newly constructed house would actually sell for, as permit values don't include land costs or overhead and profit for the builder.

Quick facts on June sales

Home sales for the region of Wayne, Oakland, Macomb and Livingston counties.

Total sales : Down 17% year-over-year to 4,077 sales.

Median sale price : Up 5.6% to $285,000.

Average days on market : Flat at 23 days.

Listings : Up 3% to 7,802 listings.

Source: Realcomp multiple-listing service

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com . Follow him on X @ jcreindl

This article originally appeared on Detroit Free Press: 7% mortgage rates don’t stop rising home prices in metro Detroit