Home sales surge as mortgage rates hit all-time low

Existing home sales continued to surge in Wisconsin as mortgage rates hit a new record low in November, according to the Wisconsin Realtors Association’s latest monthly analysis. 

The home sales report shows Wisconsin on a record pace for sales while continued low inventory levels pushed home prices even higher. 

November home sales increased 15.2 percent compared to their levels 12 months earlier, and the median price increased 15.8 percent to $223,000. 

An evaluation of the year-to-date figures reveals that sales are up 5.7 percent compared to the first 11 months of 2019. And the median price has increased 11.4 percent to $220,000 compared to that same period last year.

WRA Chairman Steve Beers said record-low mortgage rates have been the driver of sales all year. He noted November is the eighth consecutive month in which the 30-year fixed-rate mortgage hit a new record low. November’s rate is nearly a full percentage point below the rate for November 2019 and almost 2 percentage points lower than two years earlier. 

“With lower rates, buyers can either lower their monthly payment or they can step up to a larger home for a given payment,” Beers said. 

Every region of the state experienced double-digit increases in sales, with all but one region up between 11 percent and 14.6 percent. 

The exception is the southeast region, where sales increased 21.9 percent between November 2019 and November 2020. In that region, sales were particularly strong in the suburban counties surrounding Milwaukee as well as Racine and Kenosha counties. November closed sales in those counties grew at 26.3 percent over the last year.

“Low inventories continue to be a challenge in this market,” said WRA President and CEO Michael Theo. “We’re selling homes faster than they’re coming on the market, which is leading to our persistent housing shortages.”

With just 2.8 months of supply statewide, it’s a strong seller’s market. While new listings in November were on par with November 2019, the robust pace of sales this year brought total listings down nearly 31 percent over the last year. 

“Strong demand and tight supply continue to drive prices up, and our median price has remained above the $200,000 threshold since March, which is the first time we’ve seen that in Wisconsin,” Theo said, adding that it’s likely that prices above $200,000 are the new normal. 

The national median price was $317,700 in October. 

“Wisconsin home prices are definitely appreciating quickly, but our homes remain very affordable by comparison,” Theo said.