Home sales drop in May

Jun. 20—EAU CLAIRE — Home sales continue to lag behind last year's pace in Wisconsin as inventories keep shrinking and the price to buy gets higher.

The 7,222 homes sold last month in the state is 430 fewer than May 2021 — a 5.6% decline, according to statistics released Monday by the Wisconsin Realtors Association.

Sales dropped in five of the six regions that trade group divides the state into, with western Wisconsin being the exception.

Though our region's 652 sales last month matched the tally from May 2021, there were differences between counties.

Both Eau Claire and Chippewa counties saw their sales decline. The 134 homes sold last month in Eau Claire County was seven less than a year before. In Chippewa County, there were 67 homes sold in May, which is five less than the same month in 2021.

Meanwhile, the 48 homes sold last month in Dunn County is nine more than a year ago.

The inventory of homes in the state is 13.3% smaller than it was a year ago, the association noted. Fewer people have been putting their homes on the market as well, as shown by the 6.5% fewer new listings posted last month when compared to May 2021.

For those looking to sell though, their homes are fetching higher prices.

"This continues to be a very strong seller's market, even with home prices and mortgage rates rising rapidly," Brad Lois, chairman of the association, said in a news release. "There remains significant unmet housing demand from millennial buyers, which should fuel the state housing market through the prime summer sales market."

A measure used to show what the typical home is selling for continues to be higher than it was in 2021.

The median price of a home sold last month in the state was $275,000 — up $29,000 from a year ago.

In western Wisconsin, the most dramatic price increase was seen in Dunn County. The median home sold there last month went for $292,000 — $112,000 higher than a year before.

Levels of price appreciation in Eau Claire and Chippewa counties were more akin to the state overall. The median home sale price was $261,450 last month in Eau Claire County, up $30,450 from a year before. In Chippewa County, the median price rose from $236,615 in May 2021 to $261,000 last month.

Those higher prices and rising mortgage rates are making it tougher — though still within their budgets — for average families to buy homes.

"We're seeing significant annual increases in both home prices and mortgage rates, which is why affordability is falling so quickly," Michael Theo, president and CEO of the Wisconsin Realtors Association, said in a news release.

The Wisconsin Housing Affordability Index shows that a family with median income still can qualify for a regular mortgage on a median-priced home, but the index has fallen 30% in the past year.

Interest on a 30-year fixed-rate mortgage was 5.23% last month, up from 2.96% a year ago, according to Freddie Mac.

Mortgage rates have risen even higher this month. At the end of last week, the average interest on a 30year fixed mortgage reached 5.78% in the U.S. — the highest its been since the end of 2008, based on statistics from Freddie Mac's website.

While Theo expects higher home prices and mortgage rates will persist throughout 2022, he believes that the market should get easier for homebuyers at some point.

"Eventually demand pressure will moderate, and this will reduce the seller's advantage in the market," he stated.