Home sales tick up slightly in October, according to state realtors

After a dip in September, Wisconsin home sales rebounded slightly last month. But despite an increase in new listings, inventory remains tight and the median price grew to $310,000.

The Wisconsin Realtors Association’s October report shows existing home sales rose by 3.5 percent compared to the same time last year. Still, demand continued to outpace supply, especially in metropolitan counties. That pushed the median home price up by nearly 11 percent compared to the same 12-month period ending last October.  

Dave Clark is a Marquette University emeritus professor of economics. He told WPR that the only price range close to a six-month inventory, which realtors consider a balanced market, is for homes selling at $500,000 or more.

For homes selling at or below $200,000, which is considered entry level, Clark said there’s just more than three months of supply.

“It’s especially challenging for first time buyers, because they tend to be buying at those entry level price ranges and the supply is tightest there,” Clark said. 

The association reported mortgage rates increased by a quarter percent in October for a state average of 6.43 percent. Clark said that’s also affecting sellers, who likely refinanced at historically low interest rates at the end of 2020 during the COVID-19 pandemic. 

“If you were in a situation where you were thinking of, let’s say, upsizing — buying a bigger home — this would not be the time that you want to do that, because you can’t give up that very favorable rate you have right now,” Clark said. “That’s just not palatable.” 

He said as members of the baby boom generation get older and sell their homes, the state’s housing supply is expected to improve gradually. Clark said he’s hoping to see mortgage rates begin to drop over the next year, which, coupled with the slow increase in housing supply, will begin to make homeownership more affordable for first-time buyers.

“While we don’t want potential buyers to overextend themselves, you want them to be able to get into that first home,” Clark said. “Because, you know, that’s a significant way to build household wealth.”