Home Ownership and the American Dream in the Upper Peninsula

It is unusual in these contentious times for Democrats and Republicans to agree on anything, but the issue of housing – and the need for more of it – may be the exception. During 2025’s October government shutdown, the U.S. Senate passed the bipartisan Renewing Opportunity in the American Dream to Housing Act of 2025. It’s no accident that the proposed legislation includes the “American Dream” in its title. As a recent commentator on Rural Insights noted, that dream involves owning “a home of your own.” This article examines recent changes in homeownership levels across the U.P., and the factors pushing the dream of homeownership out of reach for many of its residents. But first, an overview is provided of why home ownership is central to the American Dream.

Home Ownership and the American Dream

Unlike many other countries, Americans value owning a home over renting, due to its many financial benefits. Between April 2015 and April 2023, for example, the average seasonally adjusted US home price increased nearly 80 percent, providing homeowners with a significant increase in wealth, while renters were left out. The financial system rewards home ownership. Mortgage interest is tax deductible, benefiting higher income taxpayers, while 30-year fixed-rate mortgages keep monthly mortgage payments stable and protection from inflation and interest rate increases. When mortgage rates drop, homeowners can lower their borrowing costs by refinancing. In short, homeownership is a major source of wealth. But not all Americans share in the benefits of homeownership. According to the Census Bureau, approximately 72 percent of white households owned their homes in 2015–2019, compared to 47 percent for households of color.

Home Ownership in the Upper Peninsula

The Census Bureau estimates homeownership rates for counties based on five-year survey data (Table 1). All U.P. counties have a higher rate of homeownership than the state, with ten counties having a rate of over 80 percent. Moreover, these data provide little evidence of a recent decline in rates across the region. The lowest rates are associated with counties with a university and an associated need for student rental accommodation, e.g. Houghton, Marquette and Chippewa. 

One possible explanation for the U.P.’s high rate of homeownership is the region’s aging population. For example, Ontonagon’s median age, in 2023 is 59.4, up from 52 in 2010. The comparable data for Schoolcraft is 52.1 and 47.5. A high median age indicates a lack of young people and so-called “aging in place;” people staying in their own home as they get older. These people were able to afford purchasing a home at an earlier time when the American Dream was attainable.

The Rising Cost of Homes in the Upper Peninsula

The US Federal Housing Finance Agency has developed a House Price Index using appraisal values and sales prices for mortgages bought or guaranteed by Fannie Mae and Freddie Mac (two Enterprises set up by Congress to promote homeownership). The Index has a value of 100 for the year 2000 enabling the comparison of home price values over time (Table 2). These data show that for the period 2000-2020, most counties experienced a gradual increase in Index values. Then between 2020 and 2023 the Index shot-up, with the largest increases (+80) occurring in Alger, Gogebic, Mackinac and Marquette, followed by Houghton, Keweenaw and Iron (+70).

The recent jump in home price reflects an increase in demand as a result of in-migration to the region during Covid. With few homes on the market, sellers were able to raise their prices. When there is a short supply of a particular good, it might be expected that the market would respond by increasing the supply and bring down its cost. This is not the case for housing in the U.P. In Marquette County, for example, according to Realtor.com, the housing inventory as measured by new monthly listings peaked in June 2019 at 148; by June 2025 the equivalent figure was 84. Not surprisingly, a lower inventory has translated into higher home prices. The median listing price during the same period rose from $210,000 to $367,450, a 75 percent increase. This increase might not pose a problem for potential home buyers if incomes had risen a similar amount, but they have not; Marquette County’s median household income from 2019 to 2023 (the latest date for which data are available), rose just 13 percent, making homeownership less attainable for first time home buyers.  

Rising Construction Costs 

Meeting the demand for housing is further complicated by the rising costs of new home construction. A new, 1,200 square foot, 2-bedroom home, for example, on the city’s south side is currently listed for sale at $499,000. According to the National Home Builders Association (NHBA), construction costs accounted for 64.4% of the average price of a new home in 2024 compared to 60.8% in 2022 (the finished lot was the second largest cost at 13.7%). The NHBA attributes part of the increase in construction costs to inflation in building material prices. The U.S. has a long history of importing softwood lumber to use in construction from Canada. Tariff policies to protect the U.S. lumber industry have been in place since 2017 and currently stand at 45 percent. Yet despite this protection from foreign imports domestic lumber production has not increased, since the artificially higher prices (due to the tariffs) have lessened the incentive for firms to expand their output.

A shortage of construction workers is driving up labor costs and adding to the cost of new homes. Last summer construction firms estimated that 248,000 construction jobs remained unfilled at the national level. Immigrant workers have been essential in filling this gap. According to the Urban Institute, immigrants made up more than 23 percent of the construction workforce in 2023, with about half of them undocumented. The well publicized ICE raids at job sites in 2025 have only exacerbated the labor shortage.

Final Thoughts

U.P. homeownership rates are currently higher than the national and state averages, but this is largely a function of “aging in place,” while rising home prices present a significant obstacle for young people to acquire their portion of the American Dream. U.S. homeownership peaked at 69.2 percent in 2004, since then it has dropped to 65 percent. Unless there is a way to make housing more affordable, the American Dream is likely to slip further out of reach.