Madison, Wis. - The Wisconsin REALTORS® Association (WRA) released its January 2025 Wisconsin Real Estate Report today, highlighting a continued affordability challenge. Median price increased 10.6% to $293,000 this month compared to January 2024 levels, and the average 30-year fixed mortgage rate rose to 6.96%, which is 32 basis points higher than the January 2024 average rate. The state remains in a strong seller’s market, as it stays well below the six-month benchmark that characterizes a balanced market.
Chris DeVincentis, 2025 Chair of the Board of Directors, Wisconsin REALTORS® Association, pointed out struggles of first-time buyers: “Low inventories generated strong price pressure in every region of the state, but home price appreciation was especially strong in the more urbanized areas of the northeast and southeast where prices rose in the 10% to 12% range over the last year. Higher prices and higher mortgage rates really hurt first-time buyers who rely heavily on financing in their home purchases.”
Tom Larson, President & CEO, Wisconsin REALTORS® Association, hopes for improved affordability: “We cannot draw too many conclusions about 2025 home sales based on January sales volume since we only sell about 5% of annual sales in a typical January. However, it is good to see a modest increase in home sales to start 2025 even though affordability fell 12% compared to January 2024. Hopefully mortgage rates begin to fall, improving affordability and increasing sales as we move into the spring and summer seasons.”
David Clark, Professor Emeritus of Economics and WRA Consultant, highlights a pause in short-term rates: “The Federal Open Market Committee (FOMC) is the Federal Reserve Bank’s committee that sets short-term interest rate targets. At the January FOMC meeting, the Fed indicated the labor market remains resilient, but inflation continues to be elevated. As a result, it will pause any changes to short-term rates for the near term as the Fed takes a ‘wait and see’ approach to the potential impact of the new administration’s policies on inflation and economic growth.”
REPORT HIGHLIGHTS
- Existing home sales in January 2025 only rose 0.6% compared to their January 2024 levels, but the median price increased 10.6% to $293,000 over that same period.
- Weak inventory continued to characterize the Wisconsin existing home market even as January listings improved compared to their January 2024 levels. New listings rose 8.7%, and their total listings were up 5.9% over the past 12 months.
- Even though months of available inventory rose 3.7% to 2.8 months over the last year, this market continues to be classified as a strong seller’s market since it is well below the six-month benchmark that characterizes a balanced market.
- The average 30-year fixed mortgage rate rose to 6.96%, which is 32 basis points higher than the January 2024 average rate of 6.64%.
- The combination of higher mortgage rates and higher median prices more than offset the modest 0.4% estimated increase in the state median family income, which led to lower statewide affordability.
- The Wisconsin Housing Affordability Index shows the fraction of the median-priced home that a potential buyer with median family income can qualify to purchase, assuming a 20% down payment with the remaining 80% balance financed with a 30-year fixed-rate mortgage at current levels. The index fell from 146 in January 2024 to 128 in January 2025, which is a 12.3% reduction over the past year.
- Lower affordability has resulted in more days on the market for homes that closed in January. Average days on the market rose from 79 days a year ago to 86 days in January 2025, which is an increase of 8.9% over that period.
FULL REPORT
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Last Update: Feb 20, 2025 10:02 am CST
