Michigan is Holding Steady in Affordability and Homebuilding: Can Governor Whitmer Accelerate the Pace?

Michigan’s housing market sits at a crossroads—relatively affordable compared with much of the country but slowed by limited new construction and aging inventory.

The state earned a C on the Realtor.com® State-by-State Housing Report Card, part of the Let America Build campaign that measures how well states balance affordability with new homebuilding.

Michigan’s grade reflects both opportunity and challenge: homes remain within reach for many families, but supply isn’t growing fast enough to meet demand.

And that's true across the country. President Donald Trump recently put pressure on homebuilders to increase construction nationwide, given the issues with construction in the country. In a post on his Truth Social platform in early October, he accused major builders of hoarding lots to prop up prices—likening them to OPEC, which restricts oil output to maintain high prices.

“They’re my friends ... but now, they can get Financing, and they have to start building Homes. They’re sitting on 2 Million empty lots, A RECORD,” Trump wrote. He urged Fannie Mae and Freddie Mac to intervene and “get Big Homebuilders going” to “restore the American Dream.” 

So what can Michigan do next to meet the demands?

A market finding its footing

Michigan earned a total score of 50, placing it in the middle tier of national rankings. The state’s median listing price was $284,536 in 2024—well below the national average—while the median household income of $69,042 gives residents relatively strong buying power. The Realtor Affordability Score came in at 0.86, signaling that a majority of listings are still attainable for middle-income households.

But new construction has lagged. Michigan accounted for just 1.5% of all new home permits nationwide despite representing 3% of the U.S. population, giving it a permit-to-population ratio of only 0.43.

The new construction premium—the price gap between new and existing homes—was 34.9%, suggesting that new homes are being built, but they remain priced higher than what many families can afford.

Regional context and national trends

According to the Realtor.com New Construction Insights report , the South and Midwest remain bright spots for homebuilding, with affordable land and steady demand driving production.

Nationally, the median listing price for new homes stood at $450,797, nearly flat year over year, while resale prices climbed 2.4%. That pushed the national new construction premium down to 7.8%, the lowest on record.

With that said, new builds are the clear vision forward to get more people into more homes.

“America is short more than 4.7 million homes, and every new home built helps close that gap while fueling local economies," says Shannon McGahn, executive vice president and chief advocacy officer at the National Association of Realtors®.

"NAR research shows that the U.S. has faced a persistent housing shortage for more than a decade, driving up prices and limiting options for buyers. Expanding housing supply creates jobs, supports small businesses, and affords families the opportunity to build generational wealth.”

Governor Whitmer’s plan to expand housing supply

The name of the game is tax credits in Michigan, with the Governor using them as incentive get developers interested in expansion in the state.

Over the summer, Governor Gretchen Whitmer announced a new round of investments to support affordable housing across Michigan, awarding federal 9% Low-Income Housing Tax Credits (LIHTC) to 10 new construction and rehabilitation rental housing projects in six communities. 

The projects will create or preserve at least 484 affordable rental homes. 

“In Michigan, we are making record investments into housing so we can increase supply and lower costs for buyers and renters,” said Governor Whitmer. “Today’s investments statewide will build and protect 484 homes while supporting more than 800 good-paying construction jobs. Together, let’s build, baby build more housing and make our communities better places to live, work, and invest.” 

“Every day at MSHDA, we’re focused on expanding Michigan’s housing supply, because more homes mean lower rents and more options for Michiganders,” said Tony Lentych, MSHDA Deputy Director and Chief Housing Investment Officer. “By investing in new development and rehabilitation of existing properties, we’re helping ease the pressure on the housing market and bringing stability and opportunity to more communities across the state.”

This article was produced with editorial input from Dina Sartore-Bodo and Gabriella Iannetta.