Detroit, MI
New home demand, construction soften in Metro Detroit amid high rates
Interest rates, geopolitical issues, slowing homes sales, builder says
Darian Neubecker, president of Bloomfield Hills-based Robertson Brothers Homes, said he’s seeing signs of slower buyer demand.
Buyers are still shopping for newly built homes in Metro Detroit, but fewer are moving quickly to sign contracts as higher borrowing costs pressure household budgets.
That’s what Darian Neubecker, president of Bloomfield Hills-based Robertson Brothers Homes, is seeing across the company’s communities. While potential buyers continue to research the homebuilding process, website traffic and in-person visits have declined from a year ago.
“There are certainly folks doing homework on buying,” Neubecker said. “I think as soon as we see relief on interest rates, we’ll see sales activity pick back up.”
Neubecker attributed the slowdown to temporary factors, such as higher mortgage rates amid geopolitical factors, including the U.S.-Israel war with Iran. And those factors are impacting new home activity.
Builders pulled 931 single-family permits across Macomb, Monroe, Oakland, St. Clair and Wayne counties through April, marking the second-slowest start to a year since 2012, according to the Home Builders Association of Southeastern Michigan.
In April, builders pulled 310 single-family permits across the five-county region, down 18.4% from 380 permits a year earlier. The decline was led by Wayne County, where permits fell 30.2%, while Oakland County permits dropped 16.5% and Macomb County permits fell 12.1%.
One bright spot: April activity was up slightly from March, when builders pulled 302 permits. While the need for housing remains strong, higher mortgage rates and home prices have reduced affordability and caused some prospective buyers to delay purchasing decisions, economists say.
Mortgage rates remain elevated, with a 30-year fixed loan averaging around 6.5% in recent Freddie Mac data.
“Everybody’s basically waiting to see what happens to mortgage rates, and they have been like on a seesaw,” said Daniil Manaenkov, U.S. forecasting specialist for the University of Michigan’s Department of Economics. “So you would get some improvements, it would start edging down, but then something would happen, and rates would edge back up.”
Manaenkov said housing activity today more closely resembles pre-pandemic levels than the market after COVID-19, when low borrowing costs fueled demand and construction.
The market has softened, though it’s relatively stable rather than severely depressed, Manaenkov said.
Market’s ‘one-two punch’
One recent morning, Neubecker stood inside a two-bedroom townhome under construction at the Scripps District development along Trumbull Avenue in Detroit’s Woodbridge neighborhood.
As crews worked throughout the partially finished development, he spoke of the property’s features and the state of the homebuilding market. The project includes 65 two-bedroom townhomes priced from the upper $300,000s. Construction began about two years ago and is expected to be completed in 2027.
Neubecker said it has been one of Robertson Brothers Homes’ strongest-selling communities, outperforming the company’s other southeast Michigan developments during its early months on the market.
The company has about 100 homes under construction across southeast Michigan, and he estimates sales are down between 15-20%. Some of the other communities in Metro Detroit have seen a slowdown in sales, including developments in Troy and Lyon Township.
He said recent softness in buyer demand is showing up in early-stage sales data and could mean lower permit activity in the near future, Neubecker said: “Sales is always a three- to six-month leading indicator of permit activity.”
He expects the slowdown to be temporary. “Long term, not worried; medium term, not worried,” he said. “Short term, I would classify it as a nuisance more than anything.”
Vito Castellana, owner of V.I.P Homes & Development, said the most significant slowdown is occurring at the entry-level segment of the market, where affordability is the toughest.
In Burton near Flint, he said the company is building 1,500-square-foot single-story condos priced in the high $200,000s and 2,000-square-foot two-story colonials priced in the low $300,000s. Among the company’s other projects are seven single-family homes in Sterling Heights, ranging from 2,600 square feet to 4,000 square feet with three-car garages priced in the $800,000s.
Castellana said many potential buyers are pausing due to current mortgage rates and the desire not to lose the low rates they have on their present homes.
“The market is a little bit slower than what we’re used to, given costs and given interest rates, so it’s kind of a one-two punch right now,” he said. “So it’s not as robust as we’re used to seeing in previous … spring to summer markets.”
Vito said that has changed the broader housing mix for his company, which is putting more emphasis on multifamily and rental housing as buyers prioritize flexibility.
He said construction costs have also impacted housing prices, noting long-term increases in land and development expenses. For example, the home pricing in Burton starting in the high $200,000s is possible because the company purchased the land about 10 years ago, he said.
“If you had to go develop and put those lots in (now), it might cost tenfold of what we paid for them,” he said. “And this is just hypothetically speaking, like, if I sold that house for $320,000 last week, if we had to put the lots in and put the improvements in, like in current market rate, it could probably potentially be — that $320,000 could be a $420,000 home.”
Joel Berner, senior economist at Realtor.com, said that in the Northeast and Midwest markets, including Detroit, the focus is on higher-priced homes that better accommodate cost constraints.
“New construction has been expensive,” he said. “It’s really kind of operated as a luxury product, hasn’t really competed with existing homes on price so much.”
Berner also pointed to a tight market for skilled labor, rising material costs and the challenges of urban infill development as factors that make it hard to offer lower-priced homes in places like Michigan.
‘Consistent level of activity’
Despite the ups and downs, some buyers are still in the market.
Lucy Kollin, 50, of Troy is building a four-bedroom home in Robertson Brothers Homes’ Village at Clawson Park development. It’s been a two-year research process, she said.
Kollin, a real estate agent, previously lived in a Robertson-built condo and wanted another new build close to downtown Birmingham.
She decided to purchase a 2,400-square-foot single-family home with a base price of $600,000. She expects the house to be finished by the end of August.
“If you want something, keep looking,” she said. “Don’t give up.”
The overall slowdown in permits has not brought construction activity to a complete halt. Michele Chirco, general counsel for home-builder MJC Companies, said sales have remained largely in line with last year for his company.
“We’re still seeing pretty consistent level of activity,” he said. “Doesn’t really feel too much different than what we’ve seen through most of last year.”
Affordability continues to limit how much builders can raise prices, he said, while material and labor costs have become more predictable after years of pandemic-era supply disruptions and tariff-related uncertainty.
MJC Companies has about 20 speculative single-family homes under construction that have not yet been sold, Chirco said, and about 60 homes under contract across its communities.
“We have probably a larger percentage of homes that we start as spec homes,” he said. “We tend to keep maybe three to five homes within a community that we start without a buyer, just to make that decision and that process easier for anybody looking for new construction.”
Shanta Favors, 43, lives in MJC Companies’ Cypress Gardens subdivision in Taylor. She says she has watched new phases of construction fill in around her home.
“I do like the fact that it’s a community, a whole community,” she said, describing how the subdivision has grown into a fuller neighborhood over time, even as affordability has become more difficult for new buyers.
Favors, a disability advocate, purchased her home in 2020 for $301,000 after customizations designed to make things accessible for her wheelchair use. She figures her home is valued at about $500,000 now.
“There are people still buying in this subdivision,” she said.
cwilliams@detroitnews.com
A series of vehicle infotainment system thefts in Macomb County, Michigan, led to the recovery of stolen property and the arrest of one man.
The Macomb Auto Theft Squad and the Macomb County Sheriff’s Enforcement Team served a search warrant on Friday at a home on Moross Road in Detroit as part of this investigation, the Macomb County Sheriff’s Office said.
During this search, investigators recovered four infotainment screens and modules believed to have been stolen from Dodge Ram vehicles in the St. Clair Shores area. Officers also recovered additional property that had been stolen from vehicles, the report said.
As a result of the investigation, deputies said, Rajah Jamir Pritchard-Dixon, 18, of Detroit, was taken into custody. He was arraigned on Friday in 37th District Court in Warren on one count each of breaking and entering and larceny from a motor vehicle, court records show.
Bond was set at $50,000. A probable cause conference is scheduled for June 25.
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Two Detroit sisters, including one who was nine months pregnant at the time, are accused of stabbing a worker at a Detroit chicken restaurant during a wrong-order dispute, with prosecutors alleging one sister stabbed the employee and that the women attempted to throw hot grease, pans and other items at her.
Brianna and Kierianna Long now face several charges in connection with the May 30 incident, including assault with intent to murder, assault with intent to do great bodily harm less than murder and assault with a dangerous weapon, according to local reports. Both women have pleaded not guilty.
The two sisters entered the restaurant, ran behind the counter and attacked the 23-year-old employee after they were given a wrong order, prosecutors said, according to the outlet.
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Brianna and Kierianna Long face several charges, including assault with intent to murder, assault with intent to do great bodily harm less than murder and assault with a dangerous weapon. (Detroit Police)
The sisters threw items at the employee, chased her through the restaurant, hit her with pots and pans, attempted to throw hot grease on her head and threatened to kill her, according to prosecutors.
“I’m going to kill you,” one of the sisters allegedly said during the encounter, WDIV reported.
The employee was then stabbed in the stomach with a knife by Kierianna, prosecutors said.
The sisters fled the scene after the attack but were eventually taken into custody by police. (Raymond Boyd/Getty Images)
The injured employee had to be taken to the hospital for surgery after she ran out of the restaurant and hid inside a stranger’s vehicle while calling for help.
Brianna, 29, and Kierianna, 26, fled the scene after the attack but were eventually arrested by police.
Defense attorneys attempted to dispute the allegations in court, arguing that the employee triggered the assault by saying that she did not “give a f—” about the food order error before throwing items including knives first during the incident.
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The sisters allegedly threw items at the employee, chased her through the restaurant, hit her with pots and pans, attempted to throw hot grease on her head and threatened to kill her. (iStock)
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Brianna, who was 9 months pregnant at the time of the incident, gave birth four days before her arraignment, her attorney said, ClickonDetroit reported. She pleaded with the judge by saying that she was innocent and had a 4-day-old baby at home.
Both sisters pleaded not guilty to the charges. Brianna was held on a $25,000 cash bond and Kierianna was held on a $100,000 cash bond.
Detroit ― Metro Detroiters lifted up small paper cups of Vernors in Eastern Market on Sunday and celebrated the 160th anniversary of the iconic Michigan beverage.
Dozens of people crowded a block on Riopelle Street in Detroit to participate in the toast. After a countdown, they cheered and drank the fizzy drink.
The toast was part of the Vernors 160th Anniversary Celebration, which was organized by the Vernor’s Ginger Ale Collector’s Club and held in Eastern Market. Hundreds attended the event, where Vernor’s lovers had the chance to savor Vernors ice cream and floats and sample a cream ale drink. Other activities included buying 160th anniversary T-shirts and getting Vernors temporary tattoos.
Some donned green Vernors shirts or wore gnome-shaped hats made out of paper.
Bridgette Exell of Plymouth said she and her husband came to the event because they love Vernors and they wanted to see the different foods being offered at the celebration.
“I’ve tried a lot of different ginger ales over the years,” she said, “and I think the kind of spicy bite of Vernors is top notch.”
She was waiting in a long line to get Vernors ice cream, which she had never tried before.
Celebrating Vernors history
James Vernor created Vernors and it was first served to the public in 1866, according to the Detroit Historical Society.
Keith Wunderlich of Troy and founder of the Vernor’s Ginger Ale Collector’s Club said many people came to the event in “a pouring rainstorm” to celebrate Vernors, which he thinks is “just absolutely fantastic.”
“It … says a lot,” he said.
Wunderlich said his parents dated at the Vernors soda fountain in Detroit in the 1940s. He said many people of his generation remember seeing the large neon sign on Woodward Avenue at the Vernors plant.
“It’s always part of our life,” he said of Vernors.
The “‘deliciously different’ ginger ale” saw its last bottle “filled and capped at the Woodward Avenue plant on Jan. 18, 1985,” historicdetroit.org said, thereby leaving the city despite plans to reopen elsewhere.
The drink is now owned by Keurig Dr Pepper. The company donated the Vernors that Wunderlich and others served at the celebration.
Several Eastern Market businesses participated in the event. Wunderlich said Detroit City Distillery offered adult beverages made with Vernors, and Marrow in the Market had a Vernors brunch.
Vernors fans celebrate the drink
Wunderlich and other event organizers made samples of cream ale. The drink had been served at Vernors soda fountains, he said. The drink on Sunday consisted of two parts Vernors to one part sweet cream.
Ecorse resident Michele Carmona and her daughter, Lettecia Carmona, sampled the drink.
“It was good,” Lettecia Carmona said.
Michele Carmona, who was wearing a Vernors green shirt with a gnome on it, said she likes Vernors, especially when it’s part of a Boston cooler.
When you drink Vernors, you get a “sensational bubble feeling,” she said.
Milk & Froth Ice Cream created a Vernors ice cream for the event, and it served ice cream and floats from a food truck. Vernors ice cream hasn’t been served since the 1980s, Wunderlich said.
“It was something that some of us that are a little older are familiar with,” said Andy Scheel of Shelby Township.
He said it tastes “pretty similar” to the ice cream of the past.
asnabes@detroitnews.com
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