Area Home Prices Continue to Rise, Mortgage Rates Remain Low

MILWAUKEE, Wis. -- The price of a new home continues to rise in Wisconsin, as mortgage rates remain low and the number of homes on the market remains low.

Wisconsin home sales in July were at the second best level since 2005 but lower than last July, with sales down 7.6 percent from one year ago, according to a report of the state existing home market conducted by the Wisconsin REALTORS Association.

Fewer homes on the market in 2016 caused this first decline in sales this year. Home prices in July, however, continued to increase, up 4 percent over July 2015, to a statewide median of $170,000.

The tight supply of homes on the market continues to push median prices upward with the statewide median price growing 4 percent to $170,000 over the last 12 months. This consistent trend of rising prices is in its fourth year, and year-to-date, prices have grown at about the same pace, rising 4.1 percent compared to the January-through-July period of 2015.

There were only three times since 2005 where July sales topped 8,000 units: July 2005 when 8,020 units closed, July 2015 when 8,866 homes were sold, and July 2016 where the state closed on 8,189 homes. Weak inventory levels kept sales down in every region of the state.

The 30-year fixed-rate mortgage was 3.44 percent in July, which is more than a half percent below the rate of 4.05 percent seen in July last year.

Since July 2012, median prices have grown 19.7 percent, which is an annual Still, housing remains affordable in the state due to low mortgage rates. The Wisconsin Housing Affordability Index shows that a household with median family income
and a 20 percent down payment with the remaining balance financed using a 30-year fixed mortgage at current rates can afford to buy 226 percent of the median-priced home.