December 2021 Home Sales Report Strong December Sales Result in a Record Year for Wisconsin Housing Date: January 17, 2022
December 2021 at a glance
The December median price was $236,850, which is 10.2% higher than the price 12 months earlier. On an annual basis, the median price for all of 2021 was $240,000, which is $20,000, or 9.1%, higher than the 2020 median price.
Half of the regions saw annual home sales increase, with closings up 4.4% in the Southeast region, sales up 2.2% in the Central region and closed sales up 0.7% in the South Central region. The remaining regions had lower sales in 2021 compared to 2020, with the Northeast region falling 1%, the West slipping 3.8%, and the rural North region dropping 6%. The strength of the heavily urbanized Southeast region, especially Milwaukee County, led to our record sales in 2021.
The state inventory continued to fall. New listings dropped 15.4%, which pushed total listings to just 15,037 in December, a 12.9% slide from 12 months earlier.
Months of inventory dropped to just two months of supply statewide in December, indicating a very strong seller’s market. Especially tight were the metropolitan markets, which had just 1.8 months of supply in December. Reviewing inventory by price range in 2021, the lowest inventory was seen in homes priced between $125,000 and $349,999, where there was just 1.7 months of available supply. This is well below the six-month benchmark that indicates a balanced market.
Mortgage rates have started to inch up, with the 30-year fixed-rate mortgage increasing from the record low of 2.68% in December 2020 to 3.10% in December 2021. With median prices rising 10.2% over that same 12-month period and median family income projected to be up only 0.8%, affordability slid 12.6% between December 2020 and December 2021. Still, a creditworthy buyer with median family income, a 20% down payment and a 30-year fixed-rate mortgage financing the remaining balance was qualified to buy 195% of the median-priced home in December.
Analysis from the experts
Finding opportunities in a tight housing market
"Setting a new record for sales is remarkable. That
we have been able to do this even as inventories tightened throughout 2021 is a
true testament to the persistence of buyers and the hard work of REALTORS®
to find buying opportunities, even in a strong seller’s market."
Brad Lois, 2022 Chairman of the Board of Directors, Wisconsin REALTORS® Association
Inventories and price pressure
"The annual inflation rate increased to 7% in
December, the highest rate since 1982. The Fed has signaled it will start
raising short-term interest rates this year to reduce inflationary pressures. Although
mortgage rates increased in 2021 and will likely continue to rise in 2022, keeping
inflationary expectations in check will reduce the likelihood of significant
spikes in mortgage rates this year.” ."
Dave Clark, Marquette University Economist and WRA Consultant
The Fed is now focused on inflation
"We sold more than twice as many homes as came on
the market in December, which is why home prices increased by just over 10% since
December of last year. However, there have been signs that home price
appreciation has begun to moderate in recent months, which is welcome news for
buyers looking to buy in 2022."
Michael Theo, President & CEO, Wisconsin REALTORS® Association