REPORT: Solid Sales Growth And Moderate Price Appreciation Continue In May

MADISON, WI -- The Wisconsin REALTORS® Association (WRA) released its May 2024 Wisconsin Real Estate Report today, the first report from the traditional peak season for home sales. May 2024 home sales rose 11% compared to May 2023, and the median price rose to $315,500, which is a 6.9% increase over the past 12 months. Despite the increase in sales, the average 30-year fixed-rate mortgage rose 63 basis points over the past 12 months, hitting 7.06% in May, causing affordability to drop to an all-time low.

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Mary Jo Bowe, 2024 Chair of the Board of Directors, Wisconsin REALTORS® Association, noted home sales continue to grow: “While there are certainly some headwinds in this market with average mortgage rates topping 7% in May, it is good to see ongoing sales growth as we enter the peak season for home sales.”

Tom Larson, President & CEO, Wisconsin REALTORS® Association, the current challenges of housing affordability: “This is a tough environment for buyers given the high mortgage rates and limited supply of available homes on the market. 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.”

David Clark, Professor Emeritus of Economics and WRA Consultant, hopes that progress on inflation increases the likelihood of at least one rate cut in 2024: “The Fed focuses on core inflation when deciding whether to cut short-term rates to stimulate the economy. Core inflation omits the food and energy sectors since they are somewhat volatile and less reflective of long-term inflation expectations. Core CPI inflation was at 5.3% a year ago and it stood at 3.9% in January. Most recently, it fell to 3.4% in May. Although inflation remains above the Fed’s target rate of 2%, May core inflation came in lower than economists had expected. In their most recent meeting, Fed policymakers signaled they were not prepared to lower rates in June. Hopefully, continued progress on core inflation increases the likelihood of at least one rate cut in 2024.”

REPORT HIGHLIGHTS

• May marks the beginning of the traditional peak season for home sales, with approximately 43% of annual closings taking place between May and August in a typical year.
• May 2024 home sales rose 11% compared to May 2023, and the median price rose to $315,500, which is a 6.9% increase over the past 12 months.
• On a year-to-date basis, home sales were 12.1% higher than the first five months of 2023, and the median price rose 7.3% to $295,000 over that same period.
• Improving inventories helped boost sales statewide, with new listings up 4.7% compared to May 2023, and total listings up 5.4% over that same period.
• Regionally, home sales rose by double-digit margins in all but one area. The strongest growth was seen in the West region, which increased 25.4% compared to May 2023. The Central, North, and South Central regions grew between 14.5% and 16%, and the Northeast region saw an increase of 10% over the last 12 months. In contrast, sales in the Southeast region grew 4.4%, but that region had the lowest months of available supply at just 2.9 months in May. All other regions had between 3.4-4.4 months of supply.
• The average 30-year fixed-rate mortgage rose 63 basis points over the past 12 months, hitting 7.06% in May, causing affordability to drop to an all-time low. The Wisconsin Housing Affordability Index measures the share of the median-priced home that a buyer with median family income qualifies to buy, assuming 20% down and the remaining balance financed with a 30-year fixed mortgage at current rates. The index fell 11.3% from 133 in May 2023 to just 118 in May 2024.

FULL REPORT

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