The boy, whose name was not reported, was found hanging from a bunk bed with a belt around his neck Wednesday afternoon by his 14-year-old sister, the Detroit Free Press reported.
His mother told police she forced her way into the bedroom where the boy was, got him down and called 911.
The boy "had been depressed due to her recent separation from his father, the fact that he had been bullied continuously by the children at school, in addition to the constant teasing that he had endured because he was the only boy in the home of eight females," a police report of the incident said.
The boy's mother told police he had mentioned harming himself in the past and had been seeing the family's pastor to help him cope.
"It's just a tragedy on so many levels," Detroit Police Chief Ralph Godbee Jr. said Thursday, calling the situation "unfathomable."
Neighbor Harold Pleasant said he could hardly believe what had happened.
"I'm going to be devastated about this if God don't take it away from me because I can't think of nothing else," he said. "I don't know how a kid that age can come to the conclusion to kill himself."
Detroit City Councilwoman Saunteel Jenkins, who sponsored Detroit's ordinance that makes it a misdemeanor to bully children in person or online, said the boy's suicide demonstrates the need for a stronger response to bullying.
"For a 7-year-old to lose his life in any form is heartbreaking. But to imagine a child that young, who is so sad, that believes his only option is to do this? Heartbreaking is not a strong enough word," she said.
Moore to attend retreat in to avoid Kutcher's wedding
'How to Train Your Dragon 2' releases 5-minute clip