April Housing Update

At the close of the first quarter of 2024, the real estate market has shown encouraging growth, with increases in both existing home sales and median prices compared to the previous year, signaling robust demand amidst a tight supply. In March, existing home sales climbed 3.2% year-over-year, while median prices surged 10.1% to reach $299,900. Throughout the first quarter, sales rose 5.6% relative to the first quarter of 2023, and median prices increased by 6.7% to $280,000.

The supply of homes remained constrained, with only 2.9 months of inventory available in March, significantly below the six-month mark that indicates a balanced market. However, the inventory situation showed signs of improvement across all regions, partly due to an increase in listings.

Statewide, new listings rose by 4% between March 2023 and March 2024, with total listings expanding by 10.6%. Despite these positive trends, mortgage rates also rose during the quarter, with the average 30-year fixed mortgage rate reaching 6.82% in March, up from 6.64% in January and 6.54% a year earlier. This rise in rates has adversely affected affordability.

The Wisconsin Housing Affordability Index, which measures the proportion of the median-priced home that a median-income family can afford with a 20% down payment and a 30-year fixed-rate mortgage, dropped 10.6% over the past year to 126. This index is nearing its lowest level in nearly 15 years.

Experts have weighed in on the situation: Mary Jo Bowe, 2024 Chair of the Board of Directors for the Wisconsin REALTORS® Association, noted, "Total listings have been increasing since October, and their year-over-year growth has been in the double digits for the last two months. This has helped propel first-quarter sales, marking the first increase since 2021. We hope this trend persists into the crucial summer sales period."

Tom Larson, President & CEO of the Wisconsin REALTORS® Association, commented on the challenges of high mortgage rates, "The near-7% mortgage rate, coupled with rising median prices, has pushed statewide affordability down by over 10%. The strong demand, especially from millennials, is driving up sales but also placing upward pressure on prices. We need to see a decrease in rates to improve affordability."

Dave Clark, Professor Emeritus of Economics and WRA Consultant, discussed the economic landscape, "While a soft economic landing is still within the realm of possibility, the long path to it and the fading prospect of multiple rate cuts in 2024 pose challenges. Stagnation in inflation progress, with the core inflation rate holding at 3.8% in March, and a robust labor market, complicate the potential for rate reductions by the Fed this year."

In summary, the Wisconsin real estate market has experienced growth in early 2024, driven by strong demand and an increase in listings, though challenges in affordability and economic conditions remain a concern.

Do you have questions on the real estate market or what these numbers mean?  Feel free to contact me anytime 608-669-4226.

John Reuter 

Integrity Homes 

Broker/Owner

608.669.4226

john@integrityhomeswi.com