THU AM News: Home affordability hits all-time low in May, WRA reports; Talking Trade with Sarah Helton, Michael Best Strategies

June 20, 2024

— 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.

— In the latest edition of “Talking Trade,” Michael Best Strategies Partner Sarah Helton weighs in on recently announced extensions to tariffs on Chinese imports, arguing the move is motivated by “both politics and strategy.”

“This was the first concrete action that the Biden administration has taken related to the 301 tariffs, outside of calling for comments from public stakeholders, outside of just continuing the tariffs and the exclusions in place,” she said.

Last month’s announcement detailed coming changes to tariffs on various products such as steel and aluminum, semiconductors, electric vehicles, batteries, “critical” minerals, solar cells, ship-to-shore cranes and medical products.

“The U.S. has seen that China is making significant investments in certain areas, like solar, like critical minerals. Also too getting it more into the semiconductor space,” she said. “And so at the same time, you look at the U.S. investments in these areas, more than $860 billion under this administration … They do not want to see, right, that any surge in imports from China would jeopardize the investments that the U.S. is making in those areas.”

Helton also notes the number of tariff exclusions has been declining over time, falling to about 165 in the latest update from federal officials.

She advises businesses to keep up with the latest developments in Congress and the Biden administration related to tariffs, adding “if you’re sitting on the sidelines, you’re going to miss opportunities available to you.”

Talking Trade is hosted by E.M Wasylik Associates Managing Director Ken Wasylik and M.E. Dey & Co. President and Managing Director Sandi Siegel.

Watch the full episode here.

“Talking Trade” is now available in audio form on Apple Podcasts, Google Podcasts and other platforms. Subscribe and find more episodes here.

— Around 680 Wisconsin cattle have been tested for the infectious strain of bird flu that has spread to at least three people since late April.

That’s according to State Veterinarian Darlene Konkel, who discussed state disease surveillance efforts this week during an online news conference. The USDA on April 24 issued a federal order requiring testing and reporting of highly pathogenic avian influenza in livestock, and DATCP is now requiring testing of lactating dairy cattle moving within the state before attending a fair or exhibition.

The Department of Health Services on Tuesday warned summer fairgoers about the risk of disease transmission from animals, urging precautions such as washing hands and avoiding animals that appear sick.

Wisconsin has yet to identify any cases of the highly pathogenic avian influenza H5N1 strain that’s infected at least three people — including two in Michigan — in dairy cattle, poultry or people, according to the DHS release.

But State Public Health Veterinarian Angie Maxted said some wild birds may be carrying the bird flu strain, and urged state residents to avoid contact with sick or dead animals in any environment. In the context of fairs and zoos, she suggested taking “basic common sense measures” such as reducing possible animal environment exposure for small children.

And though DHS and DATCP are monitoring for cases of the bird flu in dairy herds and domestic poultry as well, State Epidemiologist Tom Haupt said no humans have been tested for the disease in Wisconsin.

“Right now, the risk is still said to be very low, we’ve only had three cases in the United States so far this year,” he said. “Two of them had conjunctivitis and one had upper respiratory symptoms. But nonetheless, there is that possibility of more cases being identified, that would not come as a surprise to us. We are preparing ourselves as if we are going to have cases.”

Haupt said there are currently no plans to test asymptomatic people for the bird flu, though that could change as the situation evolves.

“There’s really no need for it right now, and it’s not something that we’re going to be considering at this particular point, but again, this is a fluid situation and things could definitely change,” he said.

Watch the video.

— U.S. Sen. Tammy Baldwin is seeking to bring back a program that provides help to workers displaced as a result of “unfair” foreign trade.

The Madison Dem has introduced a bill to reauthorize the Trade Adjustment Assistance, which expired in 2022, according to the release. This U.S. Department of Labor program offered support for American workers who lost their jobs or had hours or wages reduced due to foreign trade factors, such as rising imports from another country or outsourcing.

The program had been providing benefits such as employment and case management services, income support for participating in various training programs, relocation and transportation allowance for job searching, and wage subsidies for older workers, according to a bill overview.

Since it expired, more than 118,000 U.S. workers, including at least 900 in Wisconsin, would have qualified for help under the program, according to Baldwin’s office.

“We’ve seen too many big companies lay off American workers and send their jobs overseas – hurting Wisconsin families and communities,” she said in a statement. “I will always fight to keep our manufacturing jobs here in America, but if a company does do wrong to our workers, I am fighting to ensure they have the resources and tools to land on their feet.”

The TAA Reauthorization Act of 2024 would reauthorize the 2015-2021 version of the program through the end of 2030. It’s supported by the International Association of Machinists and Aerospace Workers, United Steel Workers, United Auto Workers and the AFL-CIO.

See the release and the bill text.

— WHEDA has closed on 2,700 home loans totaling more than $558 million so far this fiscal year — a new record for the agency and more than double the total number from fiscal year 2023.

Gov. Tony Evers yesterday announced the agency’s single-family team closed 240% more home purchases than last year, when WHEDA closed 1,121 home purchases totalling $190 million. The previous record from 2006 was $557.4 million, the release shows.

“Expanding access to reliable, affordable housing and homeownership opportunities is critical to recruiting and retaining our state workforce, maintaining our economic momentum, and building a state where folks want to stay, raise a family, and be successful,” Evers said in a statement.

Since launching 52 years ago, the Wisconsin Housing and Economic Development Authority has helped more than 141,800 families buy homes, WHEDA CEO and Executive Director Elmer Moore Jr. said in the release. The organization offers low-cost financing programs by working with lenders, developers, local government entities and others.

See the release.

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