Michigan's Principal Residence Exemption (PRE) exempts your primary home from 18 mills of local school operating taxes, which can save you $1,000-$3,000 or more per year depending on your home's taxable value. You must file a PRE affidavit with your local assessor to claim this exemption. This significantly reduces your monthly escrow payment.

Detroit has seen remarkable recovery with significant investment in downtown, Midtown, and neighborhoods like Corktown and West Village. Median home prices in the city are still well below the national average, offering entry-level opportunities. However, property taxes in Detroit are among the highest in Michigan, so use the calculator to understand total costs.

The Michigan State Housing Development Authority (MSHDA) offers MI Home Loans with competitive interest rates and up to $10,000 in down payment assistance for first-time buyers (no first-time requirement in targeted areas). The assistance is a zero-interest loan that is due upon sale, refinance, or when the home is no longer your primary residence.

Ann Arbor is one of Michigan's most expensive markets due to the University of Michigan, with median home prices around $420,000-$470,000. Nearby Ypsilanti offers more affordable options at $220,000-$280,000, and Saline and Dexter are in the $350,000-$400,000 range. The university creates consistent housing demand and strong resale values.

Michigan's effective property tax rate averages about 1.32%, but this varies widely. With the Principal Residence Exemption, many homeowners pay significantly less. Taxes are based on your home's taxable value, which is capped at the rate of inflation each year. When you purchase a home, the taxable value uncaps to 50% of market value.

Beyond standard mortgage costs, Michigan homebuyers should budget for winter heating ($150-$300/month during cold months), higher auto insurance rates, and possible flood insurance near Great Lakes shorelines. Some municipalities also charge city income tax (Detroit is 2.4% for residents), which impacts your overall housing affordability calculation.