Detroit Future City (DFC), a prominent urban planning and development organization, has released two reports, titled “Home Sales in Detroit” and “Black Homebuyer Demand,” during National Homeownership Month. These reports offer valuable insights into the housing market in Detroit and the region, providing data to enhance the city’s homebuying market. The reports shed light on the importance of a robust housing market as a key indicator of economic health and the role it plays in Detroiters’ ability to build generational wealth.
According to the findings, both reports demonstrate a rise in homebuyer demand and purchases over the past two years. Notably, there has been an increase in demand from Black homebuyers across various income levels. The reports highlight several key areas for growth, emphasizing the need to increase housing values to enhance Detroiters’ economic mobility. They also stress the importance of improving housing stock options and quality, offering housing at different price points, enhancing neighborhood amenities, and implementing effective neighborhood marketing strategies.
Anika Goss, President and CEO of DFC, emphasized the significance of targeted investments that foster diverse housing prices, enabling the city to attract homebuyers across a wide range of income brackets. Goss stated, “These investments should be prioritized to develop greater diversity in housing prices, allowing the city to capture homebuyers with broader ranges of income who have accessible opportunities to attain a mortgage.”
To provide a comprehensive overview of “Home Sales in Detroit,” DFC collaborated with Data Driven Detroit to analyze records from the Wayne County’s Register of Deeds for the periods of 2012-2013 and 2020-2021. The analysis focused on sales volume, types of sales, and sales prices. The reports categorized home sales into two types: market sales, which are arm’s length transactions reflecting the actual market value, and distressed sales, which typically occur at reduced prices due to pressures on property owners, such as foreclosures.
The “Home Sales in Detroit” report reveals that although the overall sales volume decreased from 27,734 to 26,286 between 2012-2013 and 2020-2021, the balance shifted from distressed sales to market sales. The report also highlights the return of market sales in many parts of the city, particularly in areas that previously had minimal sales activity. Over the analyzed period, 70% of the city’s census tracts witnessed a decline in the number of distressed sales, likely influenced by fewer tax foreclosure sales and a general stabilization of the housing market. Despite these positive trends, the median sales values have only doubled to $30,000 for the entire city, indicating a need for further improvement.
While the increase in market sales indicates a positive trend in stabilizing the city’s home purchase market, the reports underline the concerning fact that 42% of sales remain distressed. This indicates the necessity for further market stabilization and neighborhood improvement throughout the city.
The “Black Homebuyer Demand” report demonstrates a significant increase in the demand for mortgages by Black homebuyers in Detroit and the region over the past decade. The demand for mortgages by Black homebuyers in Detroit specifically has surged by 443% or 1,600 applications from 2012 to 2021, almost three times the regional growth rate. However, despite the rising demand citywide, only 1 in 5 mortgage applications by Black homebuyers in the region are made within Detroit.
The suburbs, including inner-ring cities like Eastpointe and Warren, as well as communities further out such as Romulus and Clinton Township, are witnessing substantial demand from Black homebuyers. The report identifies neighborhoods in Detroit’s northwest side, such as Grandmont-Rosedale, Bagley, and the areas between them, as well as the Eastside’s East English Village, as the Detroit neighborhoods with the highest number of mortgage applications from Black homebuyers.
The demand for mortgages in Metro Detroit cuts across various income levels, with a notable 41% increase in applications from individuals earning less than $50,000 between 2012 and 2021. In Detroit specifically, middle- and upper-class Black homebuyers experienced a 382% increase in mortgage applications, while those making less than $50,000 saw a staggering 477% surge during the same period. Moreover, Detroit has reclaimed its regional lead as the city with the highest demand for middle-class Black homebuyers, surpassing Southfield in 2017.
Anika Goss highlighted the ambitious eight-year plan announced by DFC last fall, aimed at increasing the city’s Black middle class and supporting other communities of color. While progress has been made over the past decade, Goss acknowledged that disparities in mortgage originations continue to persist. She emphasized that African Americans, who constitute 77% of Detroit’s population, face loan denial rates twice as high as their white counterparts. Addressing this issue is crucial for achieving equitable reconstruction of homeownership in the city.
In addition to the two new reports, DFC has developed an extensive research portfolio to facilitate the equitable growth of Detroit’s housing market. Recent reports, including “Buying In: Opportunities for Increasing Homeownership through Mortgage Lending,” the “Detroit Mortgage Catalogue,” and “A Detroit Homebuyers Guide to Overcoming Mortgage Application Obstacles,” provide valuable resources for potential homebuyers. Furthermore, DFC serves as the lead convener of the Detroit Housing Compact, a collaborative forum comprising over 80 stakeholders from the public, private, philanthropic, and nonprofit sectors. This initiative focuses on increasing the availability of stable, healthy, and affordable single-family homes for renters, homebuyers, and homeowners in Detroit.
For more information on the reports and DFC’s initiatives, visit the official website at www.detroitfuturecity.com. The reports shed light on the progress made in Detroit’s housing market, highlight areas for improvement, and emphasize the need for continued efforts to strengthen the city’s homebuying market and ensure equitable opportunities for all residents.
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