Wisconsin home sales recorded strong growth again in May, continuing the trend that began last summer. Sales of existing homes were up 18.9 percent in May 2012 compared to May 2011, according to the most recent monthly report by the Wisconsin REALTORS® Association (WRA). In addition, median home prices in the state rose 1.5 percent to $138,000 relative to the same month last year.
“It’s good to see Wisconsin’s housing market continuing a robust rebound from the depressed levels of the recession,” said Rob Keefe, Chairman of the WRA board of directors. He noted that the monthly growth rates have been in the double digits since July 2011, and that year-to-date home sales are up over 20 percent in the state.
Within the state, May home sales were strongest in the Central region, up 31.8 percent, followed by the Northeast and Southeast regions, both of which grew in the neighborhood of 21 percent. Also strong was the South Central region, which was up 18.5 percent over the 12-month period, followed by the West region, which grew 14.5 percent. Finally, sales in the North region were up a solid 8.1 percent over the period.
“The supply of housing remains high with over a year’s worth of inventory on the market, but this is well below the levels of last May when there was a 17- month supply of unsold homes,” said Keefe.
An improving job market is helping the housing sector in Wisconsin. Between January and April, the last month for which employment estimates are available, Wisconsin added just over 19,000 jobs on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics. This employment growth actually outpaces the growth in the labor force, which increased by more than 14,000 over the period. “We’ve always maintained that job growth is the key to sustained growth in the housing market, and the steady reduction in the state unemployment rate is one indication of an improving job market,” said WRA President and CEO, Michael Theo. Wisconsin’s unemployment rate stood at 6.7 percent in April, which is well below the national rate of 8.1 percent that same month. “With mortgage rates at 3.8 percent on a 30-year fixed-rate mortgage and an improving labor market, the ongoing growth of home sales is not surprising,” said Theo.
The statewide median price increased 1.5 percent in May compared to May 2011. This is now the third straight month of modest upward movement in statewide median prices, although the regional picture is more mixed with three regions either up slightly or flat in May, which were the Southeast, West and South Central regions; and other regions
down by modest margins, which were the North, Central and Northeast regions. Even though statewide prices have
increased, the reduction in mortgage rates has combined with slight improvements in the projected statewide median
family income to increase affordability compared to last year.
The Wisconsin Housing Affordability Index, which measures the percentage of a median-priced home that a buyer with the median family income can afford, stood at 241 in May. This is up from a revised 221 in May 2011. Assuming the state job market follows the trends of the last 11 months, inventories should shrink, which will eventually increase prices.
“But right now, low prices and low mortgage rates combine to make conditions ideal for those households ready to get into housing. Now is the time to contact a REALTOR® to identify the best bargains in this market,” said Theo.
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