The Michigan State Housing Development Authority (MSHDA) announced during its 16th annual Building Michigan Communities Conference that it projects increases in new housing starts, rising home price, and a decline in foreclosures.
"The economic and housing outlook in Michigan for 2014 is decidedly brighter than what we've seen at any time over the previous five years," said MSHDA Executive Director Scott Woosley.
The MSHDA teamed with the Home Builders Association of Michigan and the Michigan Association of Realtors to develop its 2014 industry assessment.
The groups believe Michigan will see a nearly 20 percent increase in new single-family housing starts. 2014 should see new construction on approximately 16,000 homes across the state, the highest since May 2008, according to the MSHDA.
Longer term projections estimate nearly 30,000 new housing starts by the end of 2016.
The group also projects home prices will show gains in the year. First-quarter average sales prices are up nearly 10 percent, and local associations are reporting increases as high as 27.6 percent. March was the 24th consecutive month with an increase in sales price.
"The state's housing industry is helping to spur Michigan's economic turnaround," Woosley said. "Consumer demand is getting stronger and consumer confidence is returning to prerecession levels. We're anticipating robust need for new housing construction throughout much of the state as we enter the building season."
Housing inventory should also prove to be an encouraging avenue for growth. "In many areas of Michigan, housing inventory levels have decreased to five months or less from levels as high as 17 months, encouraging wary sellers to step into the market," the group found.
Finally, the MSHDA projects that foreclosures will continue to drop, citing RealtyTrac statistics that found foreclosure filings dropped from 4,800 filing in April 2013 to 2,900 filing in March 2014.
"Michigan's residential housing market is pointed toward a sustained period of growth that we believe will extend well into the future," Woosley said. "The challenge we face is whether the building sector is going to be able to meet growing demand from buyers given the workforce and capital access issues the industry will face in many markets throughout the state."