Report: Tight Inventories Continue to Impact Wisconsin Home Market

Madison, Wis. – The Wisconsin REALTORS® Association (WRA) released its November 2024 Wisconsin Real Estate Report today, showing the state remains a strong seller’s market with limited inventory. Available supply is only at 3.3 months, well below the level of a balanced market. Affordability remains a challenge for first-time homebuyers who lack equity from the sale of an existing home, coupled with struggles regarding 30-year fixed-rate mortgages which have been rising for the last two months.

READ THE FULL REPORT HERE

Mary Jo Bowe, 2024 Chair of the Board of Directors, Wisconsin REALTORS® Association, commented on the year’s fluctuating mortgage rates: “The 30-year mortgage rate has clearly come down over the last year after it peaked at almost 8% at the end of October 2023. However, the rate has stayed in the upper 6% to low 7% range for much of this year, and it averaged 6.8% in November. High mortgage rates create significant affordability problems for first-time buyers who rely heavily on financing to buy homes.”

Tom Larson, President & CEO, Wisconsin REALTORS® Association, shed light on potential off-peak home buying advantages: “Home sales are generally slower during the winter months, but there are some potential advantages to buying during this time of year. You will likely face less competition from other buyers, and as a result, you can expect more flexibility from sellers who are motivated to list their homes during this slower season for sales.”

David Clark, Professor Emeritus of Economics and WRA Consultant, spoke to a possibility of another short-term rate decrease: “The Federal Open Market Committee, which is the rate-setting committee for the Fed, meets the week before Christmas to decide whether to lower the short-term Federal Funds rate. There is widespread speculation that the Fed will reduce the rate by another quarter point, which will mean a full percent reduction since it began cutting rates in September. While a quarter-point cut in December won’t be surprising, recent minor upticks in inflation have led Chairman Powell to suggest that the Fed can afford to be cautious as we move into the new year. With the economy currently at full employment, the Fed wants to avoid reigniting inflationary pressures in the economy.”

REPORT HIGHLIGHTS: 

• The inventory of available homes remains very tight even as solid demand conditions persist. The mismatch between supply and demand has limited sales growth and driven up home prices.
• November existing home sales rose by a modest 1.7% compared to November 2023, and the median price rose 10.8% to $310,000 over that same 12-month period. On a year-to-date basis, home sales were up 4.1% compared to the January-through-November period in 2023, and the median price rose 8.8% to $310,000.
• November sales varied across regions, with solid growth in the South Central region, up 6.9%, and the West, up 15.3%; relatively flat sales in the Central region, down 0.2%, and the Southeast, up 1.2%; and weaker sales in the Northeast, down 4.4%, and the North, down 5.1%. In contrast, year-to-date growth for 2024 was consistently positive across regions ranging from 1.8% to 6.4%, compared to the first 11 months of last year.
• Although there was improvement in total listings, which were up 7.9% compared to November 2023, the housing market remains a strong seller’s market, with just 3.3 months of available supply. This is well below the six-month benchmark that characterizes a balanced market.
• Affordability remains a significant challenge, especially for first-time buyers who don’t have equity from the sale of an existing home to apply to a home purchase. Although 30-year fixed rate mortgage rates are more than a half percent lower than November 2023, they have been rising the last two months. The Wisconsin Housing Affordability Index shows the portion of the median-priced home that a buyer with median family income can purchase, assuming 20% down and the remaining balance financed with a 30-year fixed mortgage rate. The index fell 3.2% since November 2023.

READ THE FULL REPORT HERE

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.