This post originally appeared at https://wisconsindailystar.com/news/higher-prices-mortgage-rates-hurt-home-affordability-in-wisconsin/tcsquare/2024/04/26/

by Benjamin Yount

Homes keep selling in Wisconsin but prices and the cost to get a mortgage are keeping some from being able to afford a new home.

The Wisconsin Realtors Association is out with its latest look at the state’s housing market.

Their report says home prices jumped in March by 3.2% compared to March of last year. Meanwhile, the median price of a home rose 10%.

Realtors President & CEO Tom Larson said those higher house prices are just one part of an affordability problem in the state.

“The 30-year fixed mortgage rate continues to hover near 7%, which, combined with higher median prices, has pushed statewide affordability down by just over 10%. Strong demand from millennials is driving up sales but also putting pressure on prices,” Larson said. “We really need to see rates come down if affordability is to improve.”

The Realtors’ David Clark said that’s not likely to happen for a while.

“A soft landing of the economy may still be possible, but clearly the runway is a long one, and the prospect of multiple rate cuts in 2024 is fading. The

problem is that progress on inflation has stalled,” Clark said. “The Fed’s preferred measure is core inflation, which factors out the volatile food and energy sectors. The annual core inflation rate remained at 3.8% in March, which is only slightly lower than the 4% rate of last October. This combined with a resilient labor market operating at full employment makes the prospect of multiple rate cuts by the Fed in 2024 less likely.”

The other part of the problem, the report says, is there aren’t enough homes for sale.

“Supply conditions remain very tight, with just 2.9 months of available supply in March. This is well below the six-month benchmark that signals a balanced market. Still, months of inventory improved in every region of the state due in part to more listings,” the report states.

The meridian price of a home in Wisconsin is now $299,900, though prices in the Milwaukee and Madison areas are higher than that. The median price in southeast Wisconsin is $300,000, while the median price in south central Wisconsin is $354,900.

Despite the prices, the Realtors report shows 57% of homes that are sold in Wisconsin are sold in either southeast or south central Wisconsin.

New listings were up 4% statewide between

– – –

Benjamin Yount is a contributor to The Center Square. 

The post Higher Prices, Mortgage Rates Hurt Home Affordability in Wisconsin appeared first on The Wisconsin Daily Star.