As metro Detroit housing prices surge, new construction plateaus (Detroit Free Press)

The last time metro Detroit home prices surged to new heights in the early 2000s, home builders were adding more than 13,000 houses a year to the region's housing stock.

Then construction plummeted in 2005-2006 as southeast Michigan experienced an early onset of the nationwide real estate crash. Now more than 15 years later, home-building activity is stuck at a fraction of what it was, despite today's low mortgage rates.

Builders have been constructing fewer than 5,000 new houses a year, even as a tight inventory of existing homes in the market frustrates would-be buyers and places more upward pressure on prices. Housing starts have more or less plateaued at this level since 2013, according to data from the Home Builders Association of Southeastern Michigan.

The houses that are getting built are more expensive than ever. The number of entry-level starter homes as a share of all new construction continues to go down, local builders say, in line with a similar national trend.

The ongoing lack of supply in the real estate market suggests that elevated housing prices may endure for awhile in metro Detroit. In interviews, builders said they don't foresee any major increase in home-building activity in the near future.

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https://www.freep.com/story/money/business/2022/01/14/metro-detroit-prices-surge-new-construction-plateaus/9170471002/