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Forecast: More single family home construction in Michigan in 2018

steve carmody
Michigan Radio

Michigan home builders expect demand to drive more home construction in 2018.

The Home Builders Association of Michigan predicts a one percent increase in the number of single-family homes to be constructed in 2018.   

CEO Bob Filka says demand is actually outpacing their ability to build homes.

“We’re pretty much tapped out at about 17,000 homes in terms of the current capacity to build new homes in our state,” says Filka.

Filka says local regulations and a shortage of skilled workers are keeping Michigan home builders from reaching pre-Great Recession numbers.

New federal tax law may also pose a problem, at least at the high end. 

The tax overhaul passed last year caps interest payment deductions on mortgage debt up to $750,000.  That’s down from the current $1 million.   

Daren Blomquist is with Attom Data Solutions, a company that specializes in the real estate industry.

Blomquist says lowering the mortgage interest deduction will likely steer some home builders away from higher-end projects.

“It certainly removes some of the supports for home ownership on the high end,” says Blomquist. “I would expect to see some softening there in that market.”

But overall, the trends are looking good.  

U.S. home prices climbed a robust 6.2% from a year ago, amid strong demand from would-be buyers and a shrinking supply of properties for sale.

Standard & Poor's is reporting that its SP CoreLogic Case-Shiller national home price index stood a solid 6% in October above its previous 2006 peak. Prices are climbing at more than double the pace of wage growth, creating some affordability pressures that have been offset by relatively low mortgage rates.


Steve Carmody has been a reporter for Michigan Public since 2005. Steve previously worked at public radio and television stations in Florida, Oklahoma and Kentucky, and also has extensive experience in commercial broadcasting.
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