Home affordability in Wisconsin hit an all-time low in May even as home sales rose 11% over the year, the Wisconsin Realtors Association reports.
The increase comes as total listings and median prices continue to rise, according to the latest WRA report. A total of 6,566 homes were sold in the state last month, compared to 5,917 in May 2023.
And year-to-date home sales increased 12.1% year-over-year, from 21,281 in early 2023 to 23,849 during the first five months of this year.
Meanwhile, total listings rose 5.4% over the year from 17,732 to 18,685. And the state’s median home price rose 6.9% over the year, from $295,000 to $315,000.
These changes come at the start of the “traditional peak season” for selling a home, as about 43% of annual closings happen between May and August, report authors wrote.
WRA President and CEO Tom Larson highlights the “tough environment” for buyers, given the high mortgage rates and limited supply of available homes on the market. Mortgage interest rates rose from 6.43% to 7.06% over the year, the report shows.
“We have tracked Wisconsin’s affordability level since 2009, and unfortunately affordability hit its all-time low point in May,” Larson said in the report. “The good news is that supply has been improving since late last year, which has moderated the rate of price appreciation. Hopefully mortgage rates also will moderate and help improve our affordability during the summer sales period.”
Dave Clark, a consultant to the WRA and Marquette University professor emeritus of economics, notes the Consumer Price Index inflation was 5.3% a year ago and had fallen to 3.4% in May. While it’s above the Fed’s target of 2%, that core inflation measure was lower than economists were expecting, Clark said in the report.
“In their most recent meeting, Fed policymakers signaled they were not prepared to lower rates in June,” he wrote. “Hopefully continued progress on core inflation increases the likelihood of at least one rate cut in 2024.”
See the report.
