{"id":11926,"date":"2024-07-19T19:57:19","date_gmt":"2024-07-19T19:57:19","guid":{"rendered":"https:\/\/wifamily.news\/?p=11926"},"modified":"2024-08-05T13:00:24","modified_gmt":"2024-08-05T13:00:24","slug":"analysis-milwaukee-area-housing-market-becoming-more-difficult-for-first-time-homebuyers","status":"publish","type":"post","link":"https:\/\/wifamily.news\/?p=11926","title":{"rendered":"Analysis: Milwaukee Area Housing Market Becoming More Difficult for First-Time Homebuyers"},"content":{"rendered":"<p>This post originally appeared at <a href=\"https:\/\/will-law.org\/milwaukee-area-housing-market-becoming-more-difficult-for-first-time-homebuyers\/\">https:\/\/will-law.org\/milwaukee-area-housing-market-becoming-more-difficult-for-first-time-homebuyers\/<\/a><\/p>\n<div class=\"et_pb_section et_pb_section_9 et_section_regular\">\n<div class=\"et_pb_row et_pb_row_9\">\n<div class=\"et_pb_column et_pb_column_3_4 et_pb_column_14  et_pb_css_mix_blend_mode_passthrough\">\n<div class=\"et_pb_module et_pb_text et_pb_text_13  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<p>If you read this last week\u2019s <strong><a href=\"https:\/\/www.wsj.com\/politics\/elections\/wisconsin-2024-election-housing-costs-5f502aa2\">Wall Street Journal<\/a><\/strong>, you would see that Wisconsin\u2019s housing market is a national focus. WILL\u2019s latest analysis breaks down some of the reasons why.\u00a0<\/p>\n<p><span style=\"text-decoration: underline\"><strong>Key Points:<\/strong><\/span><\/p>\n<ul>\n<li>The Milwaukee area remains more affordable than the West Coast or the Northeast, and is ranked as the 7th-most affordable nationally for homebuyers.<\/li>\n<li>The first-time homebuyer in Milwaukee has an average age of 36, a median credit score of 731, and puts down a median down payment of 5%.<\/li>\n<li>But the area is trending in a more expensive direction, fast: the existing housing stock is appreciating in value rapidly\u2014the Milwaukee area has the nation\u2019s 4th-highest year-over-year increases in price.<\/li>\n<li>This is fueled by low supply following decades of low construction: the Milwaukee metro area\u2019s housing market has America\u2019s 2nd-lowest supply of homes among major metro areas.<\/li>\n<li>That housing shortage is manifesting as a problem for renters and people who don\u2019t already own homes in the area: Milwaukee is ranked 16th-worst for renters.<\/li>\n<\/ul>\n<p>The Milwaukee metro area\u2019s housing market is currently a strong seller\u2019s market\u2014which is tough news for would-be first-time buyers. This is a problem for a region that would like to attract young professionals, make it easier for lower income families to build wealth, and retain residents for generations. In the City of Milwaukee, Mayor Cavalier Johnson hasn\u2019t been shy about his aspirations to reach <a href=\"https:\/\/www.wpr.org\/economy\/wisconsin-milwaukee-mayor-wants-grow-city-population-to-1-million-residents\">one million<\/a> residents, which would require an increase in the city\u2019s housing supply.<\/p>\n<p>Newly available data published <a href=\"https:\/\/www.aei.org\/research-products\/report\/national-home-price-appreciation-hpa-index-may-2024\/\">by the American Enterprise Institute<\/a> shows how the Milwaukee metro area\u2019s housing market is, compared to the national background, an increasingly hard one to break into. Milwaukee\u2019s home prices are appreciating rapidly: they posted a 9.14% overall year-over-year rate, which is the 4th-highest among America\u2019s 60 biggest metro areas. Meanwhile, supply is also running low, with Milwaukee having the nation\u2019s 2nd lowest supply among those same 60 areas.<\/p>\n<\/div><\/div>\n<div class=\"et_pb_module et_pb_image et_pb_image_1\">\n<p>\t\t\t\t<span class=\"et_pb_image_wrap \"><img decoding=\"async\" loading=\"lazy\" width=\"877\" height=\"193\" src=\"https:\/\/wifamily.news\/wp-content\/uploads\/2024\/07\/Screenshot-2024-07-19-143529.jpg\" alt=\"\" title=\"Screenshot 2024-07-19 143529\" class=\"wp-image-37075\" \/><\/span>\n\t\t\t<\/div>\n<div class=\"et_pb_module et_pb_text et_pb_text_14  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<p>Nationally, today\u2019s first-time homebuyer has a median credit score of 728, a median income of $96,000, a median down payment of 5%, and an average age of 38. The barrier to homeownership is higher compared to 10 years ago, as evidenced by steeper mortgage rates (6.6% compared to 4.0%)\u2014this in spite of better credit scores and today\u2019s median first home having only 93% the square footage.<\/p>\n<p>Another statistic also suggests that nationally buying your first home has become harder: comparing first-time homebuyers\u2019 income to the median income of the area gives an idea of how accessible a housing market is for the people who live there. This stat went up over the past decade, from 92% to 97%.<\/p>\n<p>On the other hand, over the past 10 years, the Milwaukee area has acquitted itself well against national trendlines. The first-time homebuyer here has a slightly lower average age of 36. The median income as a percent of the median area income is only 83% as opposed to 92% nationally, and the median size of a first-bought home, at 1,230 sq. ft., is the same as it was 10 years ago. The median credit score of 731 is nearly identical to the national median of 728, and the down payment median is the same 5% as it is nationally.<\/p>\n<p>All of these Milwaukee-area statistics go hand-in-hand with Milwaukee\u2019s status, compared to the rest of the country, as an affordable place to live and buy a home. <a href=\"https:\/\/www.aei.org\/best-and-worst-metro-areas-to-be-a-first-time-homebuyer\/\">A separate AEI ranking places Milwaukee 7th- most affordable for homebuyers<\/a> out of the country\u2019s 60 biggest metro areas. It remains easier for someone to buy their first home here than in any population center in the Northeast or on the West Coast.<\/p>\n<p>Nevertheless, the housing shortage is hitting would-be buyers in the Milwaukee area especially hard. This is because year-over-year home price appreciation (HPA) in the metro area is not only hot, but hottest in the more affordable tiers: \u201cLow\u201d price-tier homes (i.e. worth $231,000 or less) increased in price by 13.1%, while \u201cLow-Medium\u201d (up to $354,000) homes hit 9.1% and \u201cMedium-High\u201d (up to $958,000) hit 7.2%.<\/p>\n<p>Only the category of \u201cHigh\u201d suffered a negative HPA, which was typical of that category\u2019s volatile trend lines (and also of least concern to would-be first-time buyers). This makes Milwaukee\u2019s market hotter than any major metro in Texas or Florida, in addition to being ahead of Chicago\u2019s.<\/p>\n<p>In tandem, Milwaukee\u2019s supply is unusually low. Across the nation\u2019s 60 largest metro areas, only Boston had a smaller supply (as measured by months\u2019 supply); all of the other 58 had an ampler supply than Milwaukee\u2019s. For context, although <a href=\"https:\/\/www.redfin.com\/definition\/monthsof-supply\">different authorities<\/a> espouse <a href=\"https:\/\/www.rocketmortgage.com\/learn\/buyers-market-vs-sellers-market\">different rules<\/a> of thumb, somewhere around five months\u2019 worth of supply is considered \u201caverage,\u201d while fewer than that is a \u201cseller\u2019s market.\u201d Milwaukee\u2019s supply was 1.6 months\u2019 worth of housing units; Minneapolis has 2.27 and Chicago has 2.8. Phoenix had the most, at nearly 7 months.<\/p>\n<\/div><\/div>\n<div class=\"et_pb_module et_pb_image et_pb_image_2\">\n<p>\t\t\t\t<span class=\"et_pb_image_wrap \"><img decoding=\"async\" loading=\"lazy\" width=\"855\" height=\"656\" src=\"https:\/\/wifamily.news\/wp-content\/uploads\/2024\/07\/Screenshot-2024-07-19-143601.jpg\" alt=\"\" title=\"Screenshot 2024-07-19 143601\" class=\"wp-image-37076\" \/><\/span>\n\t\t\t<\/div>\n<div class=\"et_pb_module et_pb_text et_pb_text_15  et_pb_text_align_left et_pb_bg_layout_light\">\n<div class=\"et_pb_text_inner\">\n<p>Some of the factors making things challenging for would-be homebuyers are much-covered nationwide woes: high inflation pushed prices higher at the same time that higher interest rates have increased mortgage rates. Still, what\u2019s noteworthy is the shape of Milwaukee\u2019s housing market relative to the rest of the nation. Other metro markets have had to cope with those same macroeconomic issues but have weathered it better, as far as would-be homebuyers are concerned.<\/p>\n<p>Unsurprisingly, a new <a href=\"https:\/\/www.forbes.com\/advisor\/renters-insurance\/best-cities-for-renters\/#Methodology\">Forbes study<\/a> came to similar findings and ranked Milwaukee as the 16th-worst market for renters out of the nation\u2019s 95 biggest cities. Forbes\u2019 analysis prioritized affordability but also took the categories of \u201cavailability and amenities\u201d and \u201clifestyle and safety\u201d into account. By Forbes\u2019 metrics, the two best markets for renters were both in Nebraska (Lincoln and Omaha) followed by examples from the Sun Belt (Raleigh, Austin, and Oklahoma City).<\/p>\n<p>These developments underscore the urgency for policymakers to facilitate construction. <a href=\"https:\/\/www.theatlantic.com\/ideas\/archive\/2022\/11\/us-housing-supply-shortage-crisis-2022\/672240\/\">As has been said often before<\/a>, \u201cThe most basic fact about the housing crisis is the supply shortage.\u201d Supply is constrained by a variety of governmental systems, from long and uncertain permitting processes to \u201cdeath by a thousand cuts\u201d regulations that make it impossible to build modestly-sized or affordable units. As <a href=\"https:\/\/will-law.org\/wp-content\/uploads\/2022\/12\/Housing-FINAL-2.pdf\">one homebuilder<\/a> put it, \u201cWe cannot build a home for a normal family anymore.\u201d<\/p>\n<p>Though housing in Milwaukee has some things going for i \u2014like <a href=\"https:\/\/www.city-journal.org\/article\/city-of-duplexes\">a higher share of duplexes than any other major American city<\/a>, and a good share of affordably-sized units Milwaukee, and Wisconsin broadly, have generally dragged their feet <a href=\"https:\/\/housing-data.vercel.app\/\">when it comes to the creation of new housing<\/a>.<\/p>\n<p>The aforementioned Phoenix, which has about twice as many people, has created far more units than the city of Milwaukee each year for decades, both in absolute terms and on a per-capita basis (except for 2010, when Phoenix only had slightly more, per-capita). Contrasted with the Lincoln and Omaha, meanwhile, <a href=\"https:\/\/housing-data.vercel.app\/\">Milwaukee hasn\u2019t permitted more units than either of those cities in any year since 1983<\/a>, and that\u2019s without adjusting to a per-capita basis.<\/p>\n<\/div><\/div>\n<\/p><\/div>\n<div class=\"et_pb_column et_pb_column_1_4 et_pb_column_15  et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_team_member et_pb_team_member_3 clearfix  et_pb_text_align_center et_pb_bg_layout_light\">\n<div class=\"et_pb_team_member_image et-waypoint et_pb_animation_off\"><img decoding=\"async\" loading=\"lazy\" width=\"604\" height=\"960\" src=\"https:\/\/wifamily.news\/wp-content\/uploads\/2023\/02\/i-CCZ5XfS-X2.jpeg\" alt=\"Noah Diekemper\" class=\"wp-image-13648\" \/><\/div>\n<div class=\"et_pb_team_member_description\">\n<h4 class=\"et_pb_module_header\">Noah Diekemper<\/h4>\n<p class=\"et_pb_member_position\">Senior Research Analyst<\/p>\n<div>\n<p>Noah@will-law.org<\/p>\n<\/div><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>The post <a href=\"https:\/\/will-law.org\/milwaukee-area-housing-market-becoming-more-difficult-for-first-time-homebuyers\/\">Analysis: Milwaukee Area Housing Market Becoming More Difficult for First-Time Homebuyers<\/a> appeared first on <a href=\"https:\/\/will-law.org\">Wisconsin Institute for Law &amp; Liberty<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This post originally appeared at https:\/\/will-law.org\/milwaukee-area-housing-market-becoming-more-difficult-for-first-time-homebuyers\/ If you read this last week\u2019s Wall Street Journal,&#8230;<\/p>\n","protected":false},"author":123,"featured_media":11928,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-11926","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-will"],"_links":{"self":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts\/11926","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/users\/123"}],"replies":[{"embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11926"}],"version-history":[{"count":3,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts\/11926\/revisions"}],"predecessor-version":[{"id":11931,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/posts\/11926\/revisions\/11931"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=\/wp\/v2\/media\/11928"}],"wp:attachment":[{"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wifamily.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}