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Real Estate

Metro Detroit hovers near the top for fastest-rising home prices in U.S.

By Nick Manes

Metro Detroit home sellers are commanding — and getting —

top dollar in a competitive real estate market.

April 30, 2024 01:07 PM

Home prices continue rising quickly in Southeast Michigan amid a shortage of inventory and a rise in bidding wars for what is on the market.

In February, home prices in metro Detroit grew 8.9% from one year earlier, far outpacing the U.S. national rate of 6.4%, according to the S&P CoreLogic Case- Shiller Indices, a monthly measure of home prices around the country that was released Tuesday.

Metro Detroit home prices were up 0.5% in February from January, compared with 0.6% for the national average. Metro Detroit renters are also seeing   increases like much of the rest of the country. 

Based on the most recent Case-Shiller numbers on a year-over-year basis, only San Diego saw faster- rising prices, growing 11.4% from one year earlier.

Chicago saw the same 8.9% annual growth as Detroit, while metro areas including Los Angeles and New York also saw year-over-year increases nearing 9%, according to the Case-Shiller data.

At a national level, the February data shows that home prices were again surging in the lead-up to the busier spring and summer buying and selling season, according to Brian Luke, head of commodities and real & digital assets for S&P.

“Since the previous peak in prices in 2022, this marks the second time home prices have pushed higher in the face of economic uncertainty," Luke said in a news release. "The first decline followed the start of the Federal Reserve’s hiking cycle. The second decline followed the peak in average mortgage rates last October. Enthusiasm for potential Fed cuts and

lower mortgage rates appears to have supported buyer behavior, driving the 10-and 20- City Composites to new highs.”

Still, there is no relief in sight for the Fed cutting rates anytime soon or lower mortgage rates, which climbed to a five-month high last week.

The metro Detroit market, toward the end of last year, led the way nationally for home price growth for three consecutive months based on the Case-Shiller numbers, but lost that title in February when the December data was released showing that San Diego and Los Angeles were then rising faster. Still, a dearth of inventory on the market — although there are some      signs showing improvement — means that prices continue to rise across metro Detroit. Realtors and buyers recently interviewed by Crain's indicate that while the market is not at the same levels of competition as was seen in much of 2020, 2021 and 2022, bidding wars are becoming increasingly common in the region. 

While the for-sale housing market continues to experience overall price gains, renters in metro Detroit and the nation as a whole are also seeing little respite from price inflation.

A Tuesday report by apartment listing service Apartment List shows that metro Detroit rents grew 0.8% from March to April, but remain flat on a year- over-year basis. One year ago, rents in the region were declining, per the report.

The median rent in metro Detroit stands at $767 for a one-bedroom unit and $1,027 for a two-bedroom unit, according to Apartment List. The median home price in metro Detroit last month was $250,000, up 7.8% from a year earlier, per Farmington Hills-based multiple listing service Realcomp.

By Nick Manes

Nick Manes is a reporter covering residential real estate and local mortgage companies for Crain’s Detroit Business. He previously covered finance and tech startups. He joined Crain’s in 2020 after six years as a reporter at MiBiz.