If you’ve been following the housing market over the last couple of years, you know it’s been a strange ride. High rates, low inventory, prices that didn’t drop the way people expected. A lot of people have been sitting on the sidelines, waiting for things to “go back to normal.” Here’s the thing. This is the new normal, at least for now. But there are real shifts happening, and if you’re thinking about buying or selling, it’s worth understanding what’s actually going on.
Let’s start with mortgage rates. As of right now, 30-year fixed rates are sitting around 6.6%. That’s not where anyone wants them to be, but the trend is moving in the right direction. Most forecasts have rates dropping toward the mid-to-high 5s by the end of 2026. That matters because even a one-point drop in rates opens the door for millions of additional households to qualify for a purchase. Lower rates mean more buyers. More buyers mean more competition, which is something sellers should be paying attention to.
Inventory is slowly improving, but it’s still tight. Nationally, housing supply is up about 7% compared to this time last year. That sounds meaningful, and it is. It gives buyers more options than they had in 2024 or early 2025. But we’re still about 17% below pre-pandemic inventory levels. That gap doesn’t close overnight. What it means is that well-priced homes in good condition are still moving, and sellers who price strategically from the start are continuing to see strong results.
Home sales are picking up. In May, existing home sales hit a five-month high, up 3.2%, and first-time buyers made up 35% of those purchases. That’s a sign that people who have been waiting are starting to move. The market isn’t frozen. It’s finding its footing.
Here in Michigan, the picture is actually quite strong. Home prices across the state are up about 5.4% compared to last year, with the median sale price around $293,956. Southeast Michigan has been outperforming national averages on appreciation, and this summer has been notably more active than last year. Markets like the Ann Arbor and Ypsilanti corridor are seeing motivated buyers and sellers who are actually closing, not just talking about it.
The Midwest in general is one of the stronger-performing regions in the country right now. Lower price points relative to coastal markets, strong job bases, and real affordability compared to other parts of the country are drawing attention. Michigan sits right in the middle of that story.
So what does all of this mean if you’re trying to make a decision? A few things. If you’re a seller, the window of leverage you have right now, while inventory is still below normal and buyers are re-entering, is real. Waiting for rates to drop further sounds logical, but lower rates bring more buyers and more competition from other sellers. The market you’re looking at six months from now may be busier, but it may also be more crowded. If you’re a buyer, the middle of 2026 is actually a reasonable time to move. You have more options than a year ago, rates are slowly improving, and prices in Michigan are growing at a pace that rewards buying sooner rather than later.
The market isn’t perfect. It never is. But the direction is clear, and clarity is a good reason to act.
If you want to understand what this means for your specific situation (whether you’re looking to sell, buy, or just figure out what your options are), I’m happy to walk you through it.
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