2023 was referred to as the worst year to buy a home, the most unaffordable. 2024 has improved in different ways compared to last year. Interest rates have not improved year over year in any of the months this quarter. Home prices and inventory have increased significantly compared to last year. The first quarter of 2024 in Wisconsin broke trends in the number of sales and listings; take a look at the housing market in Wisconsin.
January
In Wisconsin, January 2024 was the first annualized monthly increase in existing home sales since December 2021 with an increase of 7.375% from 3,200 to 3,436. The growth in listings started the year off with higher sales which continued into the next month.
• January 2023 saw a 17.4% decrease in existing home sales compared to 2022.
The median home price increased 6% from $250,000 in Jan '23 to $265,000 in Jan '24. There was still high demand by millennial buyers that will remain until we reach a higher number of homes on the market.
Months of inventory increased 19.048% from 2.1 to 2.5. With such an increase it still remained a sellers market in January until a balanced market of 6 months of inventory occurs. Rural counties saw higher inventory levels, at 3.4 months, compared to urban counties.
Although the estimated median family income increased 2% over the last 12 months, affordability in Wisconsin declined due to higher mortgage rates and higher home prices.
• The Avg. 30 Yr. Fixed Rate Mortgage in the US was 6.64% in January '24 up 37 basis points from 6.27% in January '23.
The Wisconsin Affordability Index shows a decline in affordability by 7.1% from January 2023 (156 in Jan '23 to 145 in Jan '24).
• A value of 100 means a family with a median income has exactly enough income to qualify for a mortgage on a median-priced home. • The WI Affordability Index shows the portion of the median prices home that a qualified buyer with median family income can afford to buy, assuming 20% down and the remaining balance financed with a 30-year fixed mortgage at current rates.
February
Existing home sales increased 3.147% from 3,241 in Feb '23 to 3,343 in Feb '24. New home listings added to the increase in sales. Home sales are up 6% YTD compared to 2023.
• February sales are down 2.707% from January (3,436 to 3,343).
The median home price increased 5.664% from $260,260 in Jan '23 to $275,000 in Jan '24. The median price rose 5.9% YTD compared to 2023.
Months of inventory increased 28.571% from 2.1 to 2.7. Although inventory has increased significantly compared to last year, a seller's market remains.
Affordability in Wisconsin continued to fall. According to the WI Affordability Index, affordability fell 7.4% year over year. A combination of high prices and high mortgage rates kept affordability lower even with an increase in inventory.
March
Existing home sales increased 3.2% from 4,521 in Mar '23 to 4,666 in Mar '24. For the first time since 2021, sales have climbed due to an increase in listings this quarter.
The median home price increased 10.1% from $272,500 in Mar '23 to $299,900 in Mar '24. Year to date, the median sales price rose 6.7% to $280,000 from Q1 '23 to Q1 '23.
Months of inventory increased 26.1% from 2.3 to 2.9. Although March was the second month in a row this year with double digit increases, months of inventory remained less than half of what is needed to be considered a healthy market.
Affordability fell 10.6% according the WI Affordability Index. With 0 being unaffordable and 250 being affordable, the index record for March declined from 141 to 126. The Avg. 30 Yr. Fixed Rate Mortgage in the US was 6.82% in Mar '24 up 28 basis points from 6.54% in Mar '23.
Interest Rates
The Avg. 30 Yr. Fixed Rate Mortgage in the US over the last year peaked in October with the average rate being 7.79% recorded on Thursday, October 26, 2023. Since then, we have not reached those highs with 6.94% being the highest this quarter on Thursday, February 29, 2024. The mortgage rate rises if the Federal Funds Rate rises and the Federal Funds Rate rises if Inflation rises. This happens to discourage people from spending so inflation doesn't continue rising which has been rising; The US Inflation Rate was at 3.48% in March, compared to 3.15% the previous month and 4.98% last year.
Conclusion
It's expected to be a much better year for buyers and sellers this year. Mortgage rates are not expected to reach the highs we saw in 2023 which will bring buyers into the market that held off on buying in 2023. There are many more listings on the market as we have seen these last few months which may continue throughout the year. It is still a seller's market with months of inventory close to 3 months and with high demand seller's can still expect higher prices. If you're a buyer and see a home you like, act fast because rates may decline as inflation declines. If you're a seller, prepare to sell now as we approach the peak of the housing market. Visit this link to read full Home Sales Reports from the WRA.
I am a local real estate agent residing and working out of Lake Geneva, WI. Growing up in Walworth and working in residential construction on and around Geneva Lake I developed a diverse skill set that allowed me to help guide people through the real estate market in Walworth County.
I am a strong advocate for homeownership. Today, home affordability has reached the lowest levels in recent history. It is more affordable to rent than to own a home in an increasing number of areas in the United States. I will work hard to help you maneuver the current real estate market so that you can own property, build wealth, and gain freedom; so I can help you achieve The American Dream.
262.215.5296
223 Cook St, Suite J
Lake Geneva, WI 53147
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