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2016 looks better for Michigan home builders

Dec 21, 2015

Michigan home builders are expecting a 25% increase in housing starts next year. But that will still be far below what they were building a decade ago.

Michigan home builders have been slowly climbing out of the hole created by the Great Recession.   Housing starts fell to only six thousand in 2009.   That number is expected to rise to nearly 17,000 in 2016.

Credit Steve Carmody / Michigan Radio

“The number could be much larger,” says Bob Filka, CEO of the Michigan Homebuilders Association, “but we have issues related to workforce, having too few workers in the construction industry. We also have issues like lot availability. There were very few developments put together when the downturn happened.”

Filka says Michigan’s aging housing stock is another factor helping home builders. He says two out of three existing homes in Michigan were built before 1980.   Combined with historically low production of new homes in the past decade, Filka says that should translate into more demand for new homes.     

But the rosier picture for Michigan home builders is actually grayer than you may think.

Even with a big jump in new home construction, the projection is still less than half the new homes built annually in Michigan before the recession.

Between 1995 and 2005, Michigan home builders built more than 40,000 a year on average.

“You look at traditional modeling…we should be building far more homes,” says Filka. 

Filka says a shortage of workers and other factors are slowing growth in new home construction in Michigan.