Navigating the 2025 Housing Market: Expert Advice for West Michigan Buyers

Prospective home buyers and investors stepping into 2025 will face a housing market that continues to evolve, with unique opportunities and challenges. At Eastbrook Homes, we help you stay prepared for the fluctuations of the housing market by gathering insider housing market predictions and sharing it here. 

Read on for key insights from a representative of Lake Michigan Credit Union (LMCU), an Eastbrook Homes preferred lender. Let’s delve into the current housing market trends, mortgage interest rates, and rental prices, and how that’s all playing out in West Michigan and the Greater Lansing area.

Housing Market

The past few years have been characterized by significant fluctuations in the housing market, influenced by economic shifts and changing demographics. According to The Sun, in 2025, the market is expected to stabilize, with a projected 3.7% increase in home prices, following a 4% rise in 2024. Grand Rapids, the economic hub of West Michigan, is particularly well-positioned as a top housing market this year, thanks to an appealing mix of affordability, steady job growth, and a growing population (NAR Realtor).

As expected, the Greater Lansing area remains highly competitive, with homes often going under contract in just over a week. The median sale price in Lansing, up 11.2% from the previous year, Redfin notes, still offers an attractive entry point compared to national averages, drawing both first-time buyers and investors to the area.

Despite higher mortgage rates, demand remains robust, particularly in regions like these with limited inventory. As Becky Sims of LMCU points out, “Underlying housing demand remains strong in many regions due to limited inventory and sellers reluctant to give up their existing low-rate mortgages.” This dynamic is encouraging buyers to explore creative solutions, including new construction.

Mortgage Interest Rates

Mortgage interest rates have experienced an upward trajectory, currently averaging between 6% and 7%. This increase is largely due to the Federal Reserve’s monetary policies aimed at curbing inflation. “Although this jump tempered some refinancing and purchase activity, underlying housing demand remains strong,” Sims says.

Buyers in West Michigan are adapting to this new rate environment by exploring adjustable-rate mortgages (ARMs) and other creative options offered by lenders. “Building a new home can be a good solution to limited inventory of existing homes, also allowing one to personalize a home to meet specific lifestyle needs,” Sims notes.

Experts predict mortgage rates will remain above 6% throughout 2025, with some forecasts suggesting a gradual decline toward the end of the year. While rates are higher than recent years, Sims emphasizes, “They are still relatively moderate by historical standards. Overall, purchasing or building a home remains a solid strategy for those who are financing prepared, looking to build wealth, and seeking stability.”

Rental Prices

Rental markets are also experiencing notable changes. Increased construction of multifamily housing units, including new developments in downtown Lansing, is expected to stabilize rental prices. Realtor.com predicts a slight decrease in rental rates by 0.1% in 2025, providing some relief to renters (The Sun).

However, in Grand Rapids, where rental demand remains high, prices continue to outpace mortgage payments in some cases. This disparity is encouraging many residents to consider homeownership as a more cost-effective and stable option. “Mortgage applications surge whenever rates slightly dip,” Sims explains, “revealing pent-up buyer interest. If rates stabilize, experts anticipate a renewed surge in home buying that could encourage more listings, gradually alleviating some price pressures.”

Are you ready to focus on building wealth in 2025 by purchasing your first home or adding an investment property to your portfolio? At Eastbrook Homes, West Michigan’s leading homebuilder, we have all the resources needed to help you achieve any property goals. Start today by browsing our modifiable home plans, or move-in ready homes. Download our interactive Homeownership Guide and ensure you’re fully prepared for the process. When you’re ready, reach out to us to connect with an Eastbrook Homes sales agent.