LANSING, Mich. (Michigan News Source) – Michigan median home prices this August are up nearly 5% from last year — slightly more than the national average, according to data from Redfin and the National Association of Realtors.

“Home prices continue to march higher despite lower home sales,” said NAR Chief Economist Lawrence Yun. “Supply needs to essentially double to moderate home price gains.”

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Meanwhile, the number of homes for sale in Michigan fell by over 17% since last August, Redfin reported. Data considered all home types, including single family homes, townhouses, and condos/coops.

The NAR clocked the national median home price for all housing types at $407,100, just a few thousand dollars shy of an all-time high that was set last summer.

Mortgage rates are rising alongside home prices, hitting a daily average 30-year fixed rate of 7.65% this month. That’s the highest level in over 20 years.

Redfin says there’s still hope for buyers, however, who can leverage the record-high mortgage rates to negotiate with sellers.

“It’s still tough to win a home for under asking price, but sellers have come to terms with the fact that that 7%-plus mortgage rates are giving buyers cold feet and that homes aren’t as likely to attract multiple authors,” said Dana Anderson, a Redfin data journalist. “Many sellers are open to making concessions, like paying for repairs or helping fund a mortgage-rate buydown.”

About 43% of homes were sold above list price in Michigan in August, another year-over-year increase from 40%. This indicates that markets are becoming more competitive, with buyers entering bidding wars to get the house they’ve chosen.

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According to a report from Fannie Mae, the level of increase in home prices came as a surprise and may be difficult to reverse.

“One consequence of a stronger home price environment is that new home construction is well-supported,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Unfortunately, any hopes of a better-balanced home supply situation may rest on the ability of homebuilders to meet ongoing demand.”

Data from the Census Bureau shows that, on a national level, private housing building permits were down 2.7% from last August. In Michigan, single-family home construction was down in July from the previous year by over 20%, according to data from the Home Builders Association of Michigan.

“A major factor that is inhibiting residential sales of both new and existing homes is that home owners faced with the prospect of selling their current home, with a low mortgage interest rate, would then have to buy a new home at a much higher interest rate,” HBAM CEO Bob Filka said in a press release.

“Bottom line: it is getting harder and harder to make the math work on building homes that the average Michigander can afford.”