Wausau Pilot & Review

MADISON, Wis. — The Wisconsin REALTORS® Association (WRA) unveiled its July 2023 WI Real Estate Report today, revealing a concerning trend of weak inventories, escalating home prices, and declining sales.

In July 2023, home closings plummeted by 20.8% compared to the same month in the previous year. The median price for homes surged by 7.5%, reaching the $300,000 mark for the second consecutive month. This comes as mortgage rates continue their upward trajectory, posing additional hurdles for potential buyers.

“Most buyers, especially first-timers, rely on financing when purchasing a home. Regrettably, rates have been on an unfavorable path, with the average 30-year rates hitting 6.84% in July,” said Michael Theo, President & CEO of the WRA. He expressed hope for rate improvements in the coming months.

The Federal Reserve’s future actions remain a topic of debate. Dave Clark, Professor Emeritus of Economics and a consultant for WRA, pointed out the recent uptick in headline inflation to an annual rate of 3.2% in July. “The Fed’s concern about inflation being above its 2% target led to a hike in short-term rates last month, the highest in over two decades. While there’s a split among Fed officials about future rate hikes, rate cuts seem off the table for now,” Clark explained.

Urban areas, in particular, are feeling the pinch. Joe Horning, 2023 Chairman of the Board of Directors for WRA, emphasized the challenges faced by younger households in cities. “While rural counties are inching towards a balanced market, our urban areas are grappling with extremely low inventory levels, making it tough for younger families to secure homes,” Horning stated.

Report Insights:

  • The year-to-date data mirrors the monthly trends. Sales of existing homes from January to July 2023 were down 23.6% from the same period in 2022. Over this span, the median price climbed 8.4% to $285,000.
  • New listings in July saw a 17.7% decline from the previous year, with total listings dropping by 20.7%.
  • Regional data showed a decline in sales across all areas, ranging from 16.7% to 25.2% compared to July 2022. Rural regions experienced minimal changes in median prices, while urban areas like the Northeast region saw a significant 14.6% hike.
  • Rural areas witnessed a slight improvement in inventory, with months of supply increasing from 4.3 to 4.8. In contrast, large metropolitan areas remained stagnant at 2.9 months.
  • The Wisconsin Housing Affordability Index, which measures the affordability of median-priced homes for median-income families, stood at 125 for the second month in a row. This is the lowest since its inception in 2009, marking a 15.5% drop over the past year.

For a comprehensive look at the report, click here.