July 2023 at a glance
- Following recent patterns, weak inventories limited sales of existing homes and drove prices up significantly. July 2023 closings slid 20.8% compared to July 2022, and the median price rose 7.5% to $300,000. This was the second straight month where the statewide median price was at or above the $300,000 mark.
- The statewide picture on a year-to-date basis is consistent with the monthly data. Existing home sales for the first seven months of 2023 were 23.6% lower than the January-through-July period of 2022, and the median price rose 8.4% to $285,000 over that same period.
- Although months of available supply improved slightly relative to July 2022, both new listings and total listings continued to fall in July. New listings dropped 17.7% over the past 12 months, and total listings fell 20.7%.
- The regional picture was mixed. Sales were down by double digits in all regions, between 16.7% and 25.2% compared to July 2022, but regional price appreciation was more variable. The more rural regions saw flat to modest increases in median prices over the last 12 months; for example, the West region was down 0.8%, the North region was unchanged and the Central region was up 3.5%. In contrast, compared to July 2022, median prices rose 6.1% in the South Central region, they increased 6.9% in the Southeast region, and they rose 14.6% in the Northeast region.
- Interestingly, months of inventory saw the largest improvement in rural areas over the past 12 months, increasing from 4.3 months in July 2022 to 4.8 months in July 2023. In contrast, large metropolitan counties saw months of supply unchanged at 2.9 months, and inventory improved slightly in medium-sized towns; for example, micropolitan counties improved from 3.2 months to 3.4 months.
- The Wisconsin Housing Affordability index shows the percent of the median-priced home a buyer with median family income qualifies to purchase, assuming 20% down and the remaining balance financed with a 30-year fixed-rate mortgage at current rates. For the second straight month, the index stood at 125, which is its lowest level since the WRA began tracking this measure in 2009. This is a 15.5% reduction in the index over the last year.
Analysis from the experts
Challenges especially high in urban areas
“A balanced market is six months of supply, and so it was good to see some movement toward that benchmark in our rural counties. However, we still have very low inventory levels in our urban areas, which is making it difficult for younger households to effectively compete for homes.”
Joe Horning, 2023 Chairman of the Board of Directors, Wisconsin REALTORS® Association
The Fed's next move is uncertain
“Headline inflation ticked up slightly to an annual rate of 3.2% in July, although the less volatile core inflation measure that excludes food and energy fell to 4.7% — its lowest level since October 2021. The Fed is still concerned that inflation remains well above its 2% target, and the Fed raised short-term rates in July to the highest level in 22 years. While there is disagreement among Fed officials as to whether more rate increases will be necessary, what is clear is that we are not likely to see rate cuts in the foreseeable future.”
Dave Clark, Professor Emeritus of Economics and WRA Consultant
Mortgage rates inching upward
“Most buyers rely on financing in their purchase of a home, and this is especially true for first-time buyers. Unfortunately, rates have been moving in the wrong direction, with average 30-year rates at 6.84% in July. This is near the peak levels of last October when they averaged 6.9%. Hopefully we see improvement in the next few months.”
Michael Theo, President & CEO, Wisconsin REALTORS® Association
