WISCONSIN – Compared to May of 2023, median Wisconsin home prices have increased 6.9% and mortgage rates have surpassed 7%. Put these dynamics together, and the Wisconsin Realtor’s Association considers Wisconsin to be experiencing ‘all-time low affordability’.
The WRA has stated inventory of houses have improved, and Marquette University Professor Emeritus of Economics David Clark told WTMJ there is high demand. According to Professor Clark, first-time homebuyers are likely to experience the brunt of these dynamics.
“They don’t have high down payments and so they typically rely on credit, and these high interest rates keep them out of the market,” Prof. Clark said.
Right now, the first-time home buyer is likely an older millennial. Prof. Clark said the last few decades have put that generation in a challenging financial position.
“Normally they would have bought it (a house) sooner, but they hit the market at the worst time: coming out of the Great Recession.”
Young home buyers tend to look at urban and suburban areas for their first home. But Prof. Clark said if they cannot make that purchase happen, Southeast Wisconsin could start to notice a change in its housing market.
“Central city markets tend to be first-time buyer markets because they are more moderately priced. So, the impact in Milwaukee may be higher than it would be in some other parts of the state.”
According to Zillow, the median price of a house in Milwaukee is $208,972 and has risen 9.5% over the last year.
Across the state, the Wisconsin Housing and Economic Development Authority has closed more than 2,700 home loans exceeding $558 million in the 2024 Fiscal Year. Governor Evers released the following statement on Wednesday:
“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,” said Gov. Evers. “WHEDA has been a vital partner in supporting and expanding access to housing across the state, and together, we will continue building on the progress we’ve made over the last year to help even more folks become proud homeowners.”
Gov. Tony Evers
President and CEO of the Wisconsin Realtors Association Tom Larson released a statement on Wisconsin’s housing affordability, and said he hopes things will change in the coming months:
We have tracked Wisconsin’s affordability level since 2009, and unfortunately affordability hit its all-time low point in May. 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.”
Wisconsin Realtors Association President and CEO Tom Larson.
As the halfway point of the year is passed, Prof. Clark said he expects the 2024 Fiscal Year to be similar to the 2023 Fiscal Year, except for one thing: “We do think sales statewide will be higher.”
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