January 6, 2026 | Real Estate Market Update for Northville, Novi, South Lyon, Brighton, and Metro Detroit

Insights by Jeff Duneske, Northville Michigan Real Estate Agent

Mortgage Debt Levels Provide Important Market Context

One of the clearest ways to understand housing-market risk is to look at household mortgage debt as a percentage of GDP. Updated national data shows a sharp contrast between today’s market and the conditions that existed before the last housing downturn.

In the mid-2000s, mortgage debt accelerated rapidly. In a single year, household mortgage debt increased by nearly $800 billion, representing almost 7% of GDP. Much of that growth was driven by aggressive refinancing and homeowners pulling equity from their properties.

Today, mortgage debt levels through the second quarter of twenty twenty five remain far more restrained. The long-term data clearly show the excesses of the prior housing bubble, while the current trend reflects more disciplined borrowing and stronger financial foundations.

Why Today’s Market Is Structurally Different

Concerns about a new housing bubble tend to surface anytime prices rise. However, several critical differences separate today’s market from the last cycle.

Lending standards remain significantly stronger, and most borrowers were well qualified at the time of purchase. While there have been modest shifts in credit score distributions on newly originated loans, overall mortgage credit quality remains solid.

Equally important, most homeowners today hold meaningful equity and low-rate mortgages that remain affordable. Because of this, analysts do not expect a widespread wave of distressed sales. During the last housing downturn, distressed inventory fueled sharp and cascading price declines. That dynamic is not present in the current cycle.

Saving for a Down Payment Is Improving but Still a Hurdle

Affordability remains a challenge, especially for first-time buyers. Nationally, the typical household now needs about seven years to save for a down payment, an improvement from the twelve-year peak reached in 2022.

Although conditions have improved, the timeline is still roughly double the pre-pandemic norm. Rising home prices over the past several years pushed typical down payments significantly higher, placing added pressure on buyers with limited savings.

Since 2023, moderating prices, easing competition, expanding inventory, and slightly lower mortgage rates have helped improve the savings outlook. Expectations for twenty-twenty-six suggest incremental affordability improvements, though saving remains the primary barrier for many households.

Home Price Growth Slows as the Market Normalizes

National home price growth slowed to approximately one percent year over year in November 2025, marking the weakest pace in more than a decade. Month-over-month pricing softened slightly, reflecting a market that is cooling rather than correcting.

Looking ahead, long-term price growth expectations remain near historical averages. Forecasts point to moderate appreciation through late 2026, with market performance varying significantly by location.

Spring activity will depend heavily on mortgage rates and inventory levels. A meaningful rate decline could bring sidelined buyers back into the market, particularly in supply-constrained communities.

What This Means for Metro Detroit Homeowners and Buyers

Market conditions are increasingly local. Some Midwest and Northeast markets are already showing renewed price strength, while portions of the Sun Belt continue to experience softness.

For homeowners in Northville, Novi, South Lyon, and Brighton, success in today’s market depends on realistic pricing, thoughtful preparation, and a clear strategy. For buyers, improving selection and stabilizing prices are creating opportunities that were far less available over the past few years.

This is not a stalled market. It is a market returning to balance.

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Jeff Duneske, Northville Michigan Real Estate Agent – Keller Williams Advantage
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