Home prices in Southwest Michigan reached record levels in 2025, even as overall sales activity remained below pandemic-era peaks and housing inventory stayed constrained, according to just-released, year-end data from the Southwestern Michigan Association of REALTORS.
Association Executive Luke Jeffries said the regional market has undergone significant shifts over the past decade. Sales rose steadily from 2016 through 2019, then surged in 2020 and 2021 during the height of the pandemic housing boom. From 2022 through 2025, annual sales volumes settled back to levels similar to 2014.
While sales moderated, prices continued to climb. The average selling price rose from $199,042 in 2016 to $492,373 in 2025 — a 147% increase over the period. The year-to-date average price for 2025 was $433,508, up 15% from 2024 and a record high. The median selling price for the year reached $295,000, up 7% year over year, also a record.
December capped the year with strengthening figures. Homes sold in December 2025 rose 3% from a year earlier, totaling 223 transactions. The average selling price for the month jumped 35% year over year to $492,373, while the median price increased 13% to $295,000.
For the full year, 2,917 homes were sold across Allegan, Berrien, Cass and the western two-thirds of Van Buren counties, a 4% increase over 2024. Total dollar sales volume climbed 19% to approximately $1.26 billion.
Inventory remained limited. Active listings fell from 1,508 homes at the end of 2016 to 654 at the end of 2025. The supply of homes on the market stood at 3.9 months, below the roughly six months typically considered a balanced market. Distressed properties made up a small share of activity, with bank-owned or foreclosed homes accounting for about 1% of transactions during most of the year.
Mortgage rates fluctuated in 2025, rising from 6.13% in January to 7.17% in April before easing to 6.15% by year’s end for a 30-year conventional loan.
Looking ahead, Jeffries said national forecasts point to average mortgage rates around 6% in 2026, which could help draw more buyers and sellers back into the market if borrowing costs stabilize.
Nationally, existing-home sales rose 5.1% in December from the prior month to a seasonally adjusted annual rate of 4.35 million, according to the National Association of REALTORS®. Year over year, sales were up 1.4%. The median existing-home price nationwide was $405,400, up 0.4% from a year earlier, marking 30 straight months of annual price gains.
Housing inventory across the U.S. totaled 1.18 million units at the end of December, representing a 3.3-month supply at the current sales pace. In the Midwest, sales increased 2% month over month and were flat year over year, with a median price of $306,000, up 3.1%.
