Rising home prices in Wisconsin have outstripped income growth in recent years, according to the latest Wisconsin Policy Forum report.
The median sales price for homes in the state has risen 53.3% in five years, from $172,900 in 2017 to $265,000 in 2022, the report shows. Over the same period, median household income in Wisconsin rose by 19.7%.
“While this trend affects all homebuyers to varying degrees, it is particularly concerning for younger aspiring homebuyers who may be denied some or all of the long-term benefits of owning a home, including the opportunity to build equity,” report authors wrote.
Meanwhile, the share of renters spending more on housing than is “typically deemed affordable” has grown even as median income among renters has kept up with rising rental costs.
Wisconsin’s median monthly gross rent has risen from $819 in 2017 to $992 in 2022, marking a 21.1% increase. By comparison, median household income among renters increased 22%, according to the report.
At the same time, the share of renters in the state spending at least 30% of their income on housing increased from 43.6% to 45.4%. WPF says that’s a concerning trend, even though it’s not as bad as the years after the Great Recession. The report references a similar trend for the percentage of renters spending more than half their income on housing, who are considered severely rent burdened.
It also highlights the tight housing market’s influence on rising home prices, noting the trend of renter incomes keeping pace with rent prices might be influenced by higher-income residents renting longer than they would like.
The number of households in the state has risen by more than 211,000 since 2010, but fewer than 145,000 housing units have been permitted since then, leading to a deficit of nearly 67,000 units.
“Aspiring homebuyers who have not been able to purchase homes in a limited and more expensive market may be pushing up the median income among renters overall,” report authors wrote.
WPF recommends some state and local policy changes that could help address rising housing costs. While interest rates and materials costs are outside the scope of local control, municipal zoning changes allowing smaller homes on smaller lots or the development of duplexes and multi-family housing in more places could help, the group says.
See the full report.
