Rates Hit a 13-Month High. Here's What That Means for SE Michigan Right Now.

Why Rates Jumped and How Bad It Actually Is

Mortgage rates hit 6.71% this week, the highest they've been in 13 months. The culprit is the conflict with Iran, which rattled the bond market and pushed Treasury yields up sharply. When bond yields spike, mortgage rates follow. This isn't a Fed decision or a housing-specific problem. It's geopolitical noise bleeding into borrowing costs, and that matters whether you're looking at a $171,000 home in Wayne County or a $433,000 home in Washtenaw County.

To be direct about it: 6.71% is not catastrophic, but it does real damage to purchasing power. On a $400,000 loan, the difference between 6.25% and 6.71% is roughly $120 a month. That's not nothing.

What This Does to the SE Michigan Market

Washtenaw County's median sits at $433,466. Oakland is at $383,632. Livingston is at $412,643. Wayne County comes in considerably lower at $171,354, which gives buyers there more cushion against rate increases since the loan amounts are smaller to begin with.

At these price points, a rate spike like this tends to do one thing fast: it slows down hesitant buyers. The people who were already on the fence about whether they could afford it will wait. That could create a brief window for serious, pre-approved buyers to move on homes with less competition. We haven't seen inventory flood the market, so don't expect a sudden buyer's paradise, but the pool of active, competing buyers may thin out in the short term.

The Construction Picture Isn't Helping

Nationally, there's ongoing analysis suggesting the housing construction cycle is being artificially extended by builder rate buydowns, which have kept new construction moving even as affordability has tightened. That's relevant here because SE Michigan buyers considering new builds should look hard at those buydown offers. They can be genuinely useful, but read the fine print. A 2-1 buydown that saves you money in year one and two doesn't mean much if you can't handle the payment in year three.

What to Do With This Information

If you're buying, get fully pre-approved now before rates move again, and know exactly what your ceiling is at current rates. Don't assume rates will drop and bail you out. If you're selling in Oakland, Washtenaw, or Livingston County, your pricing still needs to reflect what buyers can actually afford to borrow today. Buyers are doing the math. Make sure your number makes sense at 6.71%.