WISCONSIN -- The Wisconsin REALTORS® Association (WRA) released its August 2024 Wisconsin Real Estate Report today showing tighter inventories, weaker sales, and higher prices in August. The decline in inventories pushed the statewide median price up 8% to $324,000 and led to a 4.7% decline in existing home sales during the last 12 months.
Mary Jo Bowe, 2024 Chair of the Board of Directors, Wisconsin REALTORS® Association, commented on progress on mortgage rates: “High mortgage rates make it really tough for first-time buyers to buy a home because they rely more heavily on financing than those trading up. So it’s good to see mortgage rates come down, and hopefully these trends continue.”
Tom Larson, President & CEO, Wisconsin REALTORS® Association, noted the slowdown in new listings: “Growth in new listings was solid during the first five months of the year, but the summer has been a different story. New listings weakened in June, had a small rebound in July, but fell back again in August. We do think new listings will improve if the downward trend in mortgage rates continues.”
David Clark, Professor Emeritus of Economics and WRA Consultant, weighed in on the Fed lowering rates: “The Fed has a dual mandate, meaning it is charged with simultaneously avoiding recessions while also controlling inflationary pressures. In its September meeting, the Federal Open Market Committee (FOMC), which is the Fed committee that sets short-term interest rate targets, lowered the target for the Federal Funds rate by a half percentage point. This is the first cut since March 2020, and it signals the Fed is now more concerned with a weakening labor market than inflationary risks. As long as inflation remains controlled, expect additional cuts when the FOMC meets in November and December.”
REPORT HIGHLIGHTS:
- For the second month this summer, new listings tightened in August compared to the same month last year. Relative to their levels a year earlier, new listings also fell in June.
- The decline in inventories pushed the statewide median price up 8% to $324,000 and led to a 4.7% decline in existing home sales during the last 12 months.
- Still, the year-to-date picture reflects solid sales growth and strong price appreciation. Home sales through August 2024 were 5.3% stronger than the first eight months of 2023, and the median price rose 8.4% to $309,900 over that same period.
- The 30-year fixed-rate mortgage continued to improve, falling just over a third of a percent in August. Specifically, the average rate dropped from 6.85% in July to 6.5% in August, which is a decline of 35 basis points. Compared to August 2023 when the average rate was 7.07%, the August 2024 rate was 57 basis points lower.
- Even though mortgage rates improved over the last 12 months, the significant price appreciation combined with only slight gains in median family income kept statewide affordability low. The Wisconsin Housing Affordability Index shows the percent of the median-priced home that a buyer with median family income would qualify to purchase, assuming a 20% down payment with the remaining balance financed with a 30-year fixed-rate mortgage at current rates. The index was 121 in August 2024, down slightly from its level of 123 one year earlier.
FULL REPORT
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Last Update: Sep 26, 2024 5:00 am CDT
