Income needed to buy a house in Michigan
A median-priced home in Michigan costs $254,200. With 20% down you'd need about $74,224 a year, $1,835 more than the state's median household income of $72,389. Michigan ranks #13 of 51 for the lowest income needed.
Income needed: $74,224 a year
Defaults: state median home value and property tax (Census ACS 2024), median homeowners insurance paid by owners with a mortgage (Census ACS 2024; quotes vary by home and ZIP code), 30-year rate 7.24% (Freddie Mac, week of 2026-10-29).
Estimated household income: about $74,224 a year for a $254,200 home in Michigan with $50,840 down.
Uses a 28/36 planning rule: modeled housing costs at 28% of gross income, housing plus other debt payments at 36%. Mortgage approval depends on the lender, loan program, credit and other circumstances. Excludes maintenance, repairs and utilities.
| Monthly cost | Amount |
|---|---|
| Principal & interest | $1,386 |
| Property tax | $249 |
| Homeowners insurance | $97 |
| Total | $1,732 |
Monthly cost by down payment
| Down payment | Cash down | Monthly cost | Income needed |
|---|---|---|---|
| 5% | $12,710 | $2,092 | $89,673 |
| 10% | $25,420 | $2,000 | $85,734 |
| 20% | $50,840 | $1,732 | $74,224 |
Income benchmarks use the 28/36 planning rule with no HOA or other debt payments. Mortgage approval depends on the lender and loan program. Monthly costs exclude maintenance, repairs and utilities. Under 20% down includes estimated private mortgage insurance of 0.5% of the loan per year.
Buying in Michigan: what's different
- Transfer tax
- 0.75% state + county tax
- On the median home
- $1,910
- Homestead break
- PRE; cap resets on sale
- First-time buyer help
- Michigan State Housing Development Authority (MSHDA)
- Transfer and recording taxes. The state real estate transfer tax is $3.75 per $500 of the price (0.75%), and counties add their own, typically 55 cents per $500 (0.11%). On the median Michigan home ($254,200), that's about $1,910 in state transfer tax.
- Property tax breaks for your home. Filing a principal residence exemption (Form 2368) with the local assessor spares your home up to 18 mills of school operating tax. Taxable value rises no faster than inflation or 5%, but it uncaps the year after a sale, so a buyer's taxes can be much higher than the seller's were.
- First-time buyer help. The Michigan State Housing Development Authority (MSHDA) offers the MI Home Loan through participating lenders. Check its site for income and price limits.
Checked against official sources on September 25, 2026. Local transfer taxes and exemptions vary, so confirm with the county before you close.
Home prices in the Michigan metro areas we cover
| Metro area | Income needed | Median home value | Median household income |
|---|---|---|---|
| Detroit, MI | $80,079 | $271,600 | $76,403 |
| Grand Rapids, MI | $89,490 | $316,600 | $81,541 |
| Ann Arbor, MI | $117,332 | $395,300 | $90,523 |
With 20% down, the median home takes about $80,079 a year in the Detroit area and $117,332 in the Ann Arbor area, compared with $74,224 for the statewide median.
Metro medians from Census ACS 2024 cover the whole metro area, including any part in a neighboring state. Income needed: 20% down at 7.24%, the metro's median property tax and its main state's median homeowners insurance for homes with a mortgage (Census ACS 2024), under the 28% rule.
What makes owning in Michigan less expensive than most states
- Home prices: the median value of $254,200 is 30% below the U.S. median of $360,600.
- Property tax: about 1.18% of value a year ($249 a month on the median home).
- Insurance: owners with a mortgage paid a median $1,164 a year for homeowners insurance in 2024 (Census ACS). Premiums have risen in most states since then, and they vary a lot by home and ZIP code, so get quotes.
- Mortgage rate: each 1-point rise in rates adds roughly $140 a month on this loan.
2 states need at least 20% less income to buy their median home. States with a similar income requirement:
- Kansas $73,599
- Missouri $72,646
- New Mexico $76,243
- North Dakota $76,783
- Ohio $70,799
- South Carolina $79,734
Frequently asked questions
How much do you need to make to buy a house in Michigan?
About $74,224 a year for the median home of $254,200 with 20% down at 7.24%. With 10% down it's about $85,734.
What is the property tax rate in Michigan?
The median Michigan homeowner pays $2,988 a year, about 1.18% of the median home value (Census ACS 2024). Rates vary by county and city.
Is it cheaper to rent or buy in Michigan?
Median rent is $1,168 a month, while owning the median home costs about $1,732 a month with 20% down, before maintenance. Renting affordably takes about $46,720 a year under the 30% rule.