Solid October Home Sales Support Record Year

MADISON, Wis. - Jan. 13, 2017 - PRLog -- Wisconsin REALTORS Association,  November 21, 2016
October 2016 sales matched last October's extraordinarily strong market, capping off the strongest 10 months of sales in Wisconsin since 2005. This strong market has continued to push median prices higher, rising 6.5 percent to $165,000 over the past 12 months, and continuing a trend of price escalation over the past four and a half years. The growth in median prices rose at more than four times the inflation rate, which increased at an annual pace of 1.6 percent in October. Prices for the first 10 months of 2016 were up 5.1 percent of the same period in 2015.

"It's clear we are on pace for a very strong 2016," said WRA board chairman Erik Sjowall. At the current pace, home sales for 2016 are projected to reach 80,000, compared to just over 76,700 homes sold in 2015. "This is impressive given the fact that inventory levels continue to fall in the state," Sjowall said.

On a year-to-date basis, all regions grew between 2.8 percent and 6.6 percent compared to the first 10 months of 2015. The Wisconsin economy is at or near what economists consider to be full employment. Over the past year, private sector job growth was solid at 27,900 jobs, including 3,200 jobs in the manufacturing sector. Mortgage rates stood at 3.47 percent in October, down from 3.80 percent this time last year. "Now that the election is over, the Federal Reserve Board has begun signaling its intention to raise short-term rates as soon as next month, so this will likely push mortgage rates up in the near future," said WRA President & CEO Michael Theo. He noted that the Fed's actions are not necessarily a bad thing. "Keeping inflation under control is critical if we are to avoid significant increases in mortgage rates," he said.

"The pressure on housing prices has been growing as our inventories have declined, and the combination of higher interest rates and higher prices will cut into affordability going forward," said Theo. Still, there are excellent opportunities available, and affordability is currently strong in the state.

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