December 16, 2025 | Real Estate Market Update for Northville, Novi, South Lyon, Plymouth and Metro Detroit | Insights by Jeff Duneske, Northville Real Estate Agent

by Jeff Duneske

Today’s update brings together three important signals shaping the housing market right now: employment trends, builder behavior, and where prices and mortgage rates are expected to settle as we move toward 2026.

When you step back and look at these pieces together, the message is clear. The market is not breaking down. It is recalibrating. And in a market like this, thoughtful planning matters more than trying to time things perfectly.

The Economy Is Still Adding Jobs, But Hiring Has Slowed

The most recent employment report shows payrolls increased by 64,000 in November. The unemployment rate held steady at 4.6 percent, and average hourly earnings rose 3.5 percent year over year to $36.86.

One notable shift is underemployment. Part-time employment for economic reasons rose by more than 900,000, bringing that total to 5.5 million people.

What this means locally

For Metro Detroit real estate, steady employment typically supports housing demand. However, rising underemployment can make buyers more cautious and payment focused. This often shows up as:

Buyers becoming more selective on price, condition, and monthly payment
Increased negotiation around concessions and inspection items
Well prepared and properly priced homes still selling, but with less tolerance for overpricing

Builders Are Relying Heavily on Incentives

Builder confidence improved modestly in December, with sentiment rising to 39. While optimism remains measured, the real story is how builders are working to move inventory.

A significant share of builders are offering incentives, including price reductions, closing cost assistance, and mortgage rate buydowns. Roughly 40 percent have reduced prices, with average cuts around 5 percent.

What this means for our local markets

For buyers considering new construction in Northville, Novi, or South Lyon, incentives can meaningfully improve affordability, especially when tied to financing.

For homeowners selling nearby resale properties, builder incentives matter. They represent direct competition and must be accounted for when pricing and positioning a home.

Home Price Expectations Point to Normal Growth

Long term price forecasts continue to point toward steady, modest appreciation rather than sharp swings. Expectations show average annual growth around:

2.6 percent in 2025
2.0 percent in 2026
2.8 percent in 2027

Over the remainder of the decade, cumulative growth remains positive. Mortgage rates are expected to gradually ease, with projections hovering near six percent by the end of 2026.

Why this matters in Metro Detroit

A slower, more normalized growth environment tends to reward:

Sellers who price correctly from the start and prepare their homes thoughtfully
Buyers who negotiate well and focus on long term lifestyle fit rather than short term headlines

Practical Guidance for This Week

For homeowners considering a move

In a normalizing market, the first week on the market carries real weight. Pricing strategy, presentation, and preparation determine whether a home attracts serious buyers or simply gathers views. Clear exit planning and understanding current competition are essential.

For buyers planning ahead

Markets like this often offer opportunities for prepared buyers. Increased inventory, builder incentives, and negotiation room can create favorable outcomes without overpaying, especially for those who have clarity around timeline and budget.

Explore Novi, Northville, South Lyon, and Plymouth Real Estate Markets

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Jeff Duneske, Northville Realtor® – Keller Williams Advantage
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