Should I Wait For Home Prices To Drop In Grand Rapids?

Been paying attention to today’s housing market? How does your neck feel? Watching costs rise can cause a bit of pain and anxiety in the best of us. Mortgage rates are hovering just below 7 percent, concerns about tariffs on a wide range of materials loom, and for every new “For Sale” sign that pops up in Grand Rapids, half-a-dozen buyers seem to appear out of thin air. It’s no wonder you’re wondering “Should I wait to buy (or build) until prices, or rates, finally fall?” The short answer: waiting can cost more than acting, because prices here continue to edge upward while inventory stays tight.

R-Value Homes of West Michigan is pleased to guide your tour through this complicated and constantly-evolving topic. Below you’ll see why the Grand Rapids housing market of 2025 and beyond remains resilient, along with a quick math check to see how “waiting for a better deal” really pencils out.

2025 Grand Rapids Housing Snapshot

Here are some big picture realities for today’s West Michigan housing market.

• Prices are still rising, not falling. The typical Grand Rapids-area home now sits just under $300k—about 1½ percent higher than this time last year.
• Homes sell fast. The median listing is under contract in 6 days. Blink and it’s gone.
• Inventory is scarce. Kent County has roughly half the number of active listings it had before the pandemic, keeping sellers in the driver’s seat.
• National spotlight. Real-estate forecasters just named Grand Rapids a Top-10 “Hot Housing Market” for 2025 thanks to job growth and relative affordability.
• Long-term momentum. Since 2013, local prices have climbed more than 250 percent. Betting on a sudden crash here has been a losing game for more than a decade.
  
  

Inventory Headache: Half the Homes, Twice the Competition

Remember 2019, when you could scroll through pages of listings? Those days are gone. Kent County currently has about half the active listings it held before the pandemic. Every new “Just Listed” alert sparks a mini-rush, and the median home goes under contract in 6 days.

Why so tight?

• Population & job growth – West Michigan keeps adding residents faster than builders can pour foundations.
• Slow resale pipeline – Baby-boom owners are locked into 3-percent mortgages; few are eager to sell.
• Construction bottlenecks – tariff uncertainty, labor shortages, and stricter energy codes lengthen build timelines (though they also yield far more efficient, lower-utility homes).
  
  

The result is a persistent Grand Rapids housing shortage. Low supply props up prices and keeps competition fierce, conditions that rarely coincide with falling home values.

If existing inventory isn’t cutting it, consider the build vs. buy in Grand Rapids question from a fresh angle: a high-performance custom home lets you lock in today’s price for land and materials, tailor every square foot, and enjoy energy bills a resale can’t touch. Waiting for a flood of listings, or a bargain-basement rate, may leave you watching from the sidelines while costs keep climbing.

Income Vs. Cost Gap Widening

Why do you feel the squeeze so acutely when you look at your finances and prepare to buy a home? For more detail, check this interactive out. Here's why your dollar may not go as far as it used to. 

1. Average home size continues to increase, while families get smaller. “The median home size for newly constructed houses has increased by 150% since 1980.” Larger homes cost more.
   
2. Inflation in construction is higher than in the general market. This data was not readily digestible, but it appears that the inflation of residential construction (with size taken out as a factor) is roughly double the rate of the major inflation indexes most of us hear about. Simply, the cost increase is not only due to the lower purchasing power of the dollar, it is also from factors unique to the construction market.

Materials & Labor: Why Construction Costs Rarely Take a U-Turn

If you’re hoping the price to build a custom home will dip and make building cheaper, the hard truth is that inputs rarely roll back, they simply rise more slowly.

• Lumber duties – Potential lumber tariffs are the “new normal,” the effects of which could easily reach your framing package.
• Steel & wiring – Global demand from data-center and EV-plant construction keeps pressure on metals and copper; suppliers quote quarterly price escalators instead of annual.
• Skilled labor – Grand Rapids carpenters, electricians, and HVAC techs are earning about 3–4 percent more each year, and builders must book crews months in advance.
• Energy-code upgrades – Tighter codes require better insulation, advanced air-sealing, and high-performance windows. Those upgrades add upfront cost but slash monthly utilities, a key selling point of our energy-efficient homes.

Bottom line? Even if resale prices flatten, the replacement cost of a new build keeps creeping upward. That’s why buyers who locked in projects last year are already sitting on instant equity.

Thought Exercise: “Wait for Lower Rates” Vs. “Lock It In Now” on an $800k Home

Let’s stress-test the common advice to “sit tight until rates drop.” Assume a 20 percent down payment, a 30-year fixed mortgage, and a modest 5 percent bump in construction costs over the next 12 months.

                                                                                                                          *30-year amortization

Looks like a win, right? Only $170 less per month—but…

1. Extra upfront cost: $40,000 more on day one.
2. Breakeven clock: $40,000 ÷ $170 ≈ 235 months (about 19½ years)
   
3. What if rates don’t fall a full point? Shave just half a point off and the payment gap shrinks to about $90, pushing breakeven beyond the 30-year mark.
4. Hidden year-of-waiting costs: a year’s rent, another 12 months in an energy-hungry home, and the risk that materials jump more than 5 percent (they’ve averaged closer to 7 percent since 2020).

Bottom line: Even at the higher price point of an $800k custom build, the numbers show that time in the Grand Rapids market beats timing it. Locking your build now means you start capturing equity and enjoying lower utility bills while others keep waiting for a rate drop that may never cover the inflation penalty.

Why Grand Rapids Is Still a Smart Bet for 2025 and Beyond

Grand Rapids isn’t on every “Hot Housing Market 2025” list by accident. Three fundamentals keep the Grand Rapids housing market resilient even when national headlines turn gloomy.

1. Job & wage growth. From health care to advanced manufacturing, local employers keep adding positions—and paying more to fill them (see the State of the Region report). More paychecks mean more qualified buyers.
2. Population momentum. The metro area adds roughly 10,000 new residents a year. Many are young professionals priced out of the coasts who appreciate Grand Rapids’ relative affordability and lifestyle.
3. Chronic undersupply. Analysts estimate Kent County is still tens of thousands of homes short of what its workforce needs. With listings hovering at half their pre-pandemic level, prices have room to run.

Add it up and you get a market where values climb steadily, dips are shallow, and waiting on a dramatic “reset” rarely works out. Long-term homeowners here have already seen prices jump more than 250 percent since 2013, proof that time in the market builds wealth.

Build vs. Buy in Grand Rapids: Finding Your Best Fit

If scrolling the MLS feels like hunting for unicorns, a new build (or a major remodel) can solve two problems at once: scarce inventory and soaring utility bills. Here’s a quick sanity check:

Not ready for a full custom home? R-Value happily tackles high-impact additions, ADUs, and other auxiliary buildings, perfect if you love your neighborhood but need more space or better performance. 

Bottom Line: Time In the Market Beats Timing the Market

Mortgage rates may slip a little, but construction costs and Grand Rapids home prices keep creeping up. On our $800k example, waiting a year for a lower rate could take 20 years to pay off, assuming everything goes perfectly. In real life, tariffs rise, wages climb, and the best lots get snapped up.

If your 2025 goal is a high-performance, energy-efficient home in Michigan, the safest financial move is to lock your project now, start building equity, and enjoy lower utility bills as soon as the keys hit your hand.

Ready to Build or Remodel in Grand Rapids, Holland, or the Lakeshore?

Let’s turn your West Michigan dream into a high-performance home. Schedule a call with us and discover the smartest path for your property in Grand Rapids, Holland, or anywhere along the Lakeshore.