Inventory Levels Improve in Wisconsin Real Estate Market, But Tight Supply Persists

Madison, Wis (Civic Media) – The real estate market in Wisconsin saw positive trends in February 2024, with increased new home listings, rising median prices, and improved inventory levels. However, challenges remain, including tight supply and the impact of higher mortgage rates on affordability. Experts in the industry are hopeful for continued growth in listings and improvements in mortgage rates to support homebuyers, particularly first-time buyers

The Wisconsin Realtors Association reports that in year-to-year February sales, the real estate market in Wisconsin experienced several notable developments. According to recent data, new home listings increased by 20.9% compared to the same period last year, while total listings saw a 7.5% rise. This influx of inventory contributed to a 3.1% increase in home sales in February compared to the previous year, and year-to-date sales have risen by 6% over the first two months of 2023 .

The median price of homes in Wisconsin also saw an upward trend. In February, the statewide median price rose by 5.7% to $275,000 compared to the previous 12 months. Similarly, the year-to-date median price increased by 5.9% to $270,000 .

The tight inventory situation is particularly evident in lower-priced homes. In February, homes listed under $125,000 had only 2.4 months of supply, while homes priced between $125,000 and just under $350,000 had approximately two months of supply. Higher-priced listings fared slightly better, with homes priced between $350,000 and just under $500,000 having 3.1 months of supply, and those priced at or above $500,000 having 4.8 months of supply.

One factor affecting the affordability of homes in Wisconsin is the rise in mortgage rates. Over the past 12 months, the average 30-year fixed mortgage rate increased by about half a percent to 6.78% in February. Although still below the peak rate of 7.79% seen in October 2023, the upward trend in mortgage rates throughout January and February has impacted affordability .

In addition to the real estate market, experts have also commented on broader economic factors. Dave Clark, Professor Emeritus of Economics and WRA Consultant, discussed the progress made by the Federal Reserve in controlling inflation. However, he noted that improvements in core inflation have slowed since September 2023, with the annualized rate standing at 3.8% in February, above the Fed’s target rate of 2%. Clark emphasized the need for further progress before the Fed considers lowering rates to stimulate the economy.