June 2024 Housing Market Recap: A Dip in Sales Amid Rising Prices

June 2024 marked a significant turning point for the Wisconsin housing market. After eight consecutive months of growth, new listings unexpectedly fell by 10.5% compared to June of the previous year. This decline played a crucial role in the 10.5% decrease in home sales over the past 12 months. Despite the drop in sales, the median home price in Wisconsin increased by 7.4%, reaching $327,500.

The rise in the 30-year fixed-rate mortgage to 6.92%, up by 21 basis points from last year, also contributed to the slowdown in home sales. Across the state, every region reported slower sales and increased prices compared to June 2023. However, the first half of the year still showed overall strong growth, with home sales up by 6.9% and the median price rising 7.1% to $300,000 compared to the same period last year.

Inventory levels showed slight improvement, settling at 3.5 months statewide, though still below the six-month threshold indicative of a balanced market. Rural areas were closest to achieving this balance with a 4.7-month supply, whereas urbanized areas remained decidedly in favor of sellers, particularly in larger metropolitan areas with just 3.2 months of supply.

The ongoing pressure from high prices and rising mortgage rates has significantly impacted affordability. Despite a modest 1% increase in median family income compared to last year, the Wisconsin Housing Affordability Index fell by 8%, reaching a new record low.

Insights from Industry Leaders

Mary Jo Bowe, the 2024 Chair of the Board of Directors for the Wisconsin REALTORS® Association, expressed concern over the drop in home sales, particularly as June is typically the peak month for sales. "The unexpected drop in new listings was disappointing. We are hopeful that this is a temporary setback and that July will see a rebound in new listings, which will help boost home sales," she noted.

Tom Larson, President & CEO of the Wisconsin REALTORS® Association, highlighted ongoing affordability issues, exacerbated by rising prices and higher mortgage rates. "With the 30-year fixed rate more than double its pre-pandemic level, reducing borrowing costs for first-time buyers is crucial. Not only would this aid new buyers, but it would also encourage more homeowners to list their properties, enhancing the overall supply," Larson added.

Economic Indicators and Future Outlook

Despite the Federal Reserve not lowering short-term interest rates in June, there are signs that economic adjustments are underway. According to recent Congressional testimony by Chairman Powell, the labor market is cooling, and core CPI inflation is improving, approaching pre-pandemic levels. This suggests a possible reduction in short-term rates later in the year, which could indirectly influence mortgage rates and potentially stimulate the housing market further.

June 2024 serves as a reminder of the dynamic and often unpredictable nature of the housing market. As we move forward, the interplay between new listings, mortgage rates, and economic policies will be key factors shaping the market's trajectory.

John Reuter 

Broker/Owner 

Integrity Homes 

608-669-4226

john@integrityhomeswi.com 

Real Broker, LLC