November 2023 Home Sales Report Home price appreciation remains robust even as sales decline moderately Date: December 21, 2023
November 2023 at a glance
Wisconsin’s existing home sales fell 3.4% in November 2023 relative to November 2022, which is the second month in a row in which the annual sales reduction was in single digits. This is the lowest annual rate of decline since May 2022 when sales fell 3.2%. The statewide median price rose 7.7% to $280,000, which is similar to the pattern seen throughout 2023.
Year to date, median prices increased 7.6% to $282,212 compared to the first 11 months of 2022. Statewide existing home sales fell 18.5% over that same period.
The 30-year fixed mortgage rate peaked in late October at 7.79%, and the average rate for November was 7.44%, which is 64 basis points higher than the November 2022 average.
Consistently strong home price appreciation and higher mortgage rates have offset any gains in family income over the past 12 months. The Wisconsin Housing Affordability Index shows the portion of the median-priced home that a representative buyer with median family income qualifies to buy, assuming a 20% down payment and the remaining balance financed with a 30-year fixed-rate mortgage at current rates. The index fell from 141 in November 2022 to just 127 this November, which is a 9.9% reduction in affordability.
November new listings grew by 7.2% compared to 12 months earlier, and this is the second consecutive month of growth in new listings. Total listings are now just 2.4% below their levels of November 2022.
The market continues to be classified as a seller’s market with just 3 months of available supply. However, this is still an improvement from November 2022 when there were just 2.5 months of inventory.
Analysis from the experts
Continued progress on new listings
“We saw new listings increase at a 2% annual pace in October, and they are up over 7% in November. Hopefully this trend continues so we can move closer to a balanced market in 2024.”
Joe Horning, 2023 Chairman of the Board of Directors, Wisconsin REALTORS® Association
Recent improvement in mortgage rates
“The 30-year fixed mortgage rate has been over 7% since mid-August, and thankfully rates have been trending down since peaking at the end of October. Hopefully that continues because high rates effectively price many first-time buyers out of the market, and high rates also keep potential sellers from listing their homes, especially if they have an existing mortgage at a very low rate.”
Michael Theo, President & CEO, Wisconsin REALTORS® Association
The elusive soft landing?
“The U.S. Federal Reserve has a dual mandate to both keep inflation low — its target is 2% — and also maintain full employment. When the economy overheats, the Fed raises short-term interest rates to slow the economy and control inflation. If the Fed can hit its inflation target without precipitating a recession, it achieves a so-called “soft landing.” So far, the significant progress on inflation has not generated a spike in unemployment. The next 12 months should reveal whether we get this elusive outcome.”
Dave Clark, Professor Emeritus of Economics and WRA Consultant