October 2023 Home Sales Report October Home Sales Fall at Slower Pace Amid Softening Demand Date: November 20, 2023
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