Signs of relief emerge for Wisconsin homebuyers

GREEN BAY – Market conditions have shown signs of improvement for Wisconsin homebuyers as the state’s busy season ends.

Winter generally brings a slowdown in housing markets, but buyers who brave the cold temps should find more favorable conditions such as more homes for sale and cheaper financing. 

National mortgage interest rates in November have dropped after reaching a 23-year high in late October. Buyers also haven’t had to offer quite as much over the asking price in order to have a chance at homes. Coupled together, they amount to improving affordability, said Victoria Imhoff, a real estate agent with Century 21 Ace Realty in Appleton. 

“Things are actually starting to shift in buyers’ favor a bit more than it has been,” Imhoff said.

Wisconsin housing market data for October shows existing home sales continued to recover and inventory improved, according to the Wisconsin Realtors Association. Existing home sales dropped by 7.2% in October, ending a run of double-digit percentage declines seen for much of 2023. Some key counties even logged increases in existing home sales last month. 

“This is still a challenging market for buyers, but at least we are seeing some slight improvement on the supply side,” said Michael Theo, WRA’s president and CEO, in a media release. 

Here are several trends starting to favor buyers and how sellers can adapt to housing market changes as 2023 winds down.  

Home sales increase in Milwaukee, Green Bay, Oshkosh and Fond du Lac areas

WRA data shows existing home sales continued to decline statewide in October.

The report had a silver lining, though: Home sales increased in several of Wisconsin’s bigger housing markets. 

Rock County, home to Beloit and Janesville, recorded 197 sales, an 8.2% increase over October 2022. Milwaukee and Ozaukee counties logged sales increases of 5.1% and 9.8%, respectively. 

In northeastern Wisconsin, sales increased in the Green Bay (2.6%), Oshkosh (2.2%) and Fond du Lac (3.9%) areas.

The combination of mortgage interest rate trends, more homes on the market and declining competition contribute to such positive trends, Imhoff said. 

Buyers will see more homes for sale near them 

Newly listed homes for sale increased to 6,719 in October, up 2% from the 6,590 homes listed in October 2022. It’s the first time since February 2022, 18 straight months, that new listings in Wisconsin increased.

More existing homes on the market means more opportunities for buyers and, potentially, better affordability since existing homes are by far the state’s largest source of inventory, said Joe Horning, WRA’s board chair.

“Hopefully this trend continues and leads to more affordable options for first-time buyers in the coming year,” Horning said in a media release.

Wisconsin homebuyers will find better mortgage interest rates

The rise in 15- and 30-year mortgage interest rates from historic lows in 2020 crushed buyers’ ability to afford the dramatic spikes in home prices in the last five years.

Now, rates have started to fall. 

The average 15- and 30-year mortgage rates peaked in late October at 7.03% and 7.79%, respectively, and by Nov. 22 declined to 6.67% and 7.29%, according to national mortgage lender Freddie Mac. 

In general, every 1% decrease in your mortgage rate reduces your interest costs by about $48 per month per $100,000 borrowed, or about $150 on a $300,000 home.

Lower mortgage rates and more offers coming in closer to the asking price have combined to improve affordability for some buyers, Milly Saldarriaga, of ShoreWest Realtors in Green Bay, said.

More: Wisconsin median home sale price tops $300,000 in June, a first for the state

More homes for sale near Milwaukee, Appleton, Eau Claire and Stevens Point

The problem for many buyers has long been a lack of homes for sale. But there’s ongoing signs buyers in 62 of Wisconsin’s 72 counties will find more homes for sale, per WRA.

The inventory of homes for sale — measured in months it would take to sell every home in a given market — began a slow rise in late summer that picked up more momentum in October. 

Inventory in Portage County, home to Stevens Point, doubled in October, from 1.7 months to 3.4 months. Other notable inventory surges can be found in the Appleton area (59.1%), Milwaukee County (26.1%), Eau Claire (34.5%), and Dane County (16.7%).

Buyers might not need to waive home inspections

For the last few years, buyers would have to offer well above asking price and consider some risky concessions, like waiving a home inspection, if they wanted any chance of getting their offer accepted.

In another change in the market, Imhoff said buyers have been able to keep inspections in their offers recently with some success. 

Saldarriaga said she does not see inspection waivers as much anymore, either.

Did you ask about down payment assistance? 

Saldarriaga suggested buyers ask their mortgage lender and any regional housing agencies or nonprofits about down payment assistance, a crucial tool to assist families with a major up-front cost. 

She noted NeighborWorks Green Bay can offer some buyers down payment assistance and the city of Green Bay launched a down payment assistance program for qualified buyers in December 2022. Saldarriaga said it cannot hurt to ask if there is help.  

“There are institutions who can help you with down payment costs,” Saldarriaga said. “You might not always qualify for grants, but you might qualify for NeighborWorks.”

Here’s what Wisconsin home sellers can expect

Housing markets like Madison, Milwaukee and Green Bay remain solid seller’s markets, but not quite the as intensely in sellers’ favor.

“It’s not the same market,” Saldarriaga said. “The market is normalizing.”

Home prices likely won’t drop, but sellers might not get offers way above asking prices anymore, Saldarriaga said. Competition persists for properties priced below $300,000, but it’s softened a bit in higher price ranges. Right-priced homes may sell in a day or two; others may sit a little longer, Imhoff said.

“Now this is kind of how it is,” Imhoff said. “It’s important to set expectations ahead of time.”

Contact Jeff Bollier at (920) 431-8387 or jbollier@gannett.com. Follow him on Twitter at@JeffBollier.