METRO DETROIT NEW CONSTRUCTION PERMITS DROP IN 2025

The final data from 2025 is in and our market remains in flux, as for the second time in 3 years, we weren’t able to break the 4,000 mark for residential single-family home permits in Southeast Michigan; the total ended up around 3,400.

Some context.

The number of building permits pulled is often how we measure the health of residential construction market, with two categories to focus on: single-family homes, and multi-family; our preference is single-family homes.

No, it doesn’t tell you how many homes sold, but these days builders start very few homes that aren’t already sold, and with inventory low and builder specs typically selling within 60 days of completion (or less), it’s a decent indicator.

Some history.

It’s been a wild ride for new home construction in Metro Detroit over the past 25 years or so.

In the early 2000’s, we were regularly in the 14,000 to 15,000 range for SF permits, peaking at just under 16,000 ins 2004. Then the market crashed and by 2009, we bottomed-out around 1,300 permits. Yes, in one year.

From 2012 onward, things leveled out and the new normal became 4,000-5,000 permits a year, getting to almost 6,000 in 2016. It stayed that way into the 2020’s.

Remarkably, we even maintained those numbers during covid, but then interest rates skyrocketed in 2023 and we’ve yo-yo’d between 3,000 and 4,000 permits annually since.

Some reasons why.

We won’t bore you with all of the reasons why (there are many), but in short: we lost builders, ran out of land, and costs skyrocketed.

Options in outer-ring suburbs still abound, where land is plentiful and "reasonably" priced; Northern Macomb County, Livingston County, etc.

However, as the push away from urban centers started to reverse post-recession, options for building closer to the city became few and far between; the Woodward Corridor being a prime example.

While the former still boasts a number of new neighborhoods, the latter is mostly one-off's; vacant parcels or tear-downs, for individual builds. Occasionally a school or municipal building will close, and a builder can sneak in 15-20 homes.

Some hope.

If you’re wondering why we’re sharing this info, there are two reasons:

1. The low inventory for new homes is legit, and the process to finding options that do exist is scattered and difficult. If you’re frustrated with your search, it’s for good reason and you are not alone.
2. Despite our anemic new home market, more than three thousand people did build or buy new homes last year, so it is certainly possible - you just need to know where to look.

We can help with that.

Don’t assume you’re seeing everything online; work with the New Home Experts® and know for certain that all options are being explored.

We have the builder relationships and market knowledge, to ensure we’ll find a location that works, a builder you love, and a floorplan that meets the needs of you and your family. And we are with you throughout the process - from search, to build, through the warranty period, and beyond.

 Let’s connect and discuss your new home search!

Pictured at top: one of the homes built in 2025, by Mark Adler Homes; they would love to build one just like this for you too.

The owners of The New Home Experts®, have over 40 years of combined experience in real estate, including time with builders like Pulte & Toll Brothers.  They also provide market research for area builders, developers, and national firms.  If you’re considering a new home, remember: the builders' rep represents the builder, not you.  Work with the only local agents in Metro Detroit to specialize in new homes, and save money in the process – ask us how!