The housing market in metro Detroit will see modest gains this year, as the shortage of available homes in the region continues, and more first-time home buyers entering the market find a slight increase in home prices, according to a report by RE/MAX of Southeastern Michigan in Troy.
“2015 was a strong year for metro Detroit’s housing market,” says Joe Sabatini, vice president of RE/MAX of Southeastern Michigan. “With an improved local economy and stronger consumer confidence, we are confident that 2016 will be a year of positive trends as well.”
Sabatini says the housing shortage that has lasted for several years in the region due to a lack of new construction and potential sellers reluctant to list their homes will continue, especially in popular neighborhoods that generate multiple offers. However, he expects home inventory will improve slightly this year due to rising home prices and improved consumer confidence.
Sabatini says after several consecutive years of home price increases, metro Detroit home prices have returned to prerecession levels. He expects home prices will continue to rise, but at a more conservative rate than previous years as the market continues to stabilize. The National Association of Realtors predicts home prices will increase 4-5 percent in the coming year.
Sabatini says homebuyers will likely see higher mortgage rates this year, although increases are expected to be minor and gradual. He says more renters will make the jump to home ownership, although first-time buyer activity will still remain below normal levels in 2016.