October 2023 at a glance
- Mortgage rates continued to rise in October, softening demand pressure slightly as we move into the off-peak housing market. Existing home sales fell by just 7.2% in October 2023 compared to October 2022, which is the first time since August 2022 that the annualized decline in sales has been in the single digits. The median price rose 7.7% to $280,000 over that same 12-month period.
- Regionally, all but one region had sales decline by less than 10% over the past 12 months. Specifically, compared to October 2022, sales dropped between 6.1% and 6.3% in three regions — the North, Northeast and Southeast — and sales fell 8% in the South Central region and 9.7% in the West region. The Central region dropped 11.2% over the past year.
- Year-to-date sales are still down by double digits, falling 20% compared to the first 10 months of 2022, and the statewide median price rose to $287,000, which is 8.3% higher than the January-through-October period last year.
- Mortgage rates averaged 7.62% in October, which is up from 7.20% in September, and up from 6.90% a year earlier.
- This continues to be a strong seller’s market with just 3.3 months of supply, which is well short of the benchmark of six months that signals a balanced market. Still, there has been continued improvement in supply compared to a year earlier with just 2.7 months of supply.
- In addition, October new listings rose 2% from a year earlier, which represents the first evidence of positive annual growth since February 2022 when new listings increased 1.1%. This pushed total listings to 17,788 homes, which is just 4.3% below the October 2022 levels.
- Affordability remains near all-time low levels since the WRA began tracking affordability in 2009. The Wisconsin Housing Affordability Index shows the percent of the median-priced home that a typical buyer with median family income qualifies to purchase, assuming a 20% down payment and the remaining balance financed with a 30-year fixed-rate mortgage at current rates. The index stood at 127 in October 2023, which is 8.6% lower than the October 2022 level of 139.
Analysis from the experts
Improvement in new listings
“The largest source of housing supply by far comes from sellers listing existing homes, so it is encouraging to see our new listings grow on a year-over-year basis. Hopefully this trend continues and leads to more affordable options for first-time buyers in the coming year.”
Joe Horning, 2023 Chairman of the Board of Directors, Wisconsin REALTORS® Association
Opportunities in off-peak season
“This is still a challenging market for buyers, but at least we are seeing some slight improvement on the supply side. This is a good time for buyers to remain engaged with their REALTOR®. Price pressure typically softens a bit in the off-peak season because there are typically fewer competitors during the late fall and winter months.”
Michael Theo, President & CEO, Wisconsin REALTORS® Association
Ongoing progress on inflation
“The actions of the Federal Reserve Bank have helped ease inflationary pressures, which will likely cause the Fed to pause its rate hikes for the remainder of the year. And while the growth of real GDP was quite strong in the third quarter, there are signs that consumer expectations regarding the future are beginning to wane. This is actually good news as it suggests that the Fed won’t need to increase short-term interest rates to further slow the economy.”
Dave Clark, Professor Emeritus of Economics and WRA Consultant
