DETROIT (Michigan News Source) – Homebuyers are looking to move away from Detroit, according to data from Redfin home buyer searches.

Detroit hit #9 on the list of cities homebuyers are most eager to leave, with more than a quarter of Detroit homebuyers shopping on Redfin looking for homes outside the metro area.

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Those leaving Detroit shopped on the East Coast, looking toward Florida, Boston, and D.C. to find new homes. The majority of searches from homebuyers wanting to move to Detroit came from California and New York, according to Redfin.

Home prices in Detroit are down slightly from last year, with a final sale averaging around $80,000 and usually coming in under list price.

According to Redfin, homebuyers prefer to live near Detroit but not within the metro area, bidding up prices in nearby Royal Oak and Dearborn. Sale prices in both areas have dramatically outpaced those in Detroit proper, increasing by 7% and 36% respectively.

Mortgage rates

Recent trends for the housing market and mortgage rates have reduced new home sales, which slowed nationally in November by 12.2%. But, according to the National Association of Homebuilders (NAHB), things are looking good for the housing market in 2024.

“New home sales activity should improve in the months ahead as mortgage interest rates settle in below a 7% rate,” said Alicia Huey, chairman of the NAHB. “Our latest builder survey turned positive in December, with builders indicating they expect a rise in future sales.”

Affordability

In 2023, only 16% of home listings were affordable for the typical household. That was a drop by over 20% from the previous year and nearly 50% from before the pandemic.

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Within Detroit, 50% of homes remain affordable, but that number is still a 15% drop from 2022.

Data also showed significant ethnic disparity in housing affordability among Detroit residents, with only 32% of homes affordable for Black households and 66% affordable for white households.

Still, Redfin is also optimistic that housing market conditions are on the upswing.

“Many of the factors that made 2023 the least affordable year for homebuying on record are easing,” said Redfin Senior Economist Elijah de la Campa. “Mortgage rates are under 7% for the first time in months, home price growth is slowing as lower rates prompt more people to list their homes, and overall inflation continues to cool.”

With mortgage rates falling to the lowest levels since May and driving an increase in home supply, Campa predicts that homebuyers will put in their bids in 2024.

“Buyers and sellers are learning to live with uncertainty,” said Shay Stein, a Redfin Premier real estate agent in Las Vegas. “They’ve realized no one has a crystal ball that can predict exactly when mortgage rates will fall back to 5%, so they’re making moves now because they can only wait so long to be near their grandkids, live in an RV like they’ve always dreamt of or finalize their divorce.”