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Date: February 23, 2015

MADISON, Wis. – Existing home sales fell in January but median prices rose at a healthy pace, according to the most recent statewide housing market analysis by the Wisconsin REALTORS^® Association (WRA). Home sales in January 2015 fell by 3.7 percent relative to January 2014, while median prices were up 6.5 percent to $135,000 over the same period.

“January is typically our slowest month for home sales, so it’s important to keep this decline in perspective,” said Dan Kruse, WRA board chairman. A typical January accounts for just 4.8 percent of annual sales in Wisconsin. “With such a small base of sales, a 3.7 percent difference is only 125 fewer sales this January compared to January 2014,” said Kruse.

The January numbers, however, did show some interesting regional differences in sales activity. The Central region was up 24.1 percent in January after falling by about the same margin the previous year. Other regions saw more moderate changes. The North region was up 1.9 percent, and the South Central region increased 0.8 percent during the January 2014 to January 2015 period. Three regions saw their sales fall over that same time frame: the West and Southeast regions fell between 5 and 7 percent, and the Northeast dropped 11.6 percent. “Drawing any conclusions from this data is made even more difficult due to the severe winter last year, which created substantial sales volatility throughout these regions,” Kruse added.

Median home prices continued their upward trend in January, rising to $135,000, which is 6.5 percent higher than January 2014. This continues the trend of price appreciation over the last three years, according to WRA President and CEO Michael Theo. “Home prices in Wisconsin have been rising 34 of the last 35 months,” said Theo. But he added, “Median family income has gone up and interest rates have gone down during this 35-month span, helping to offset the higher prices and keeping our housing affordable.” The Wisconsin Housing Affordability Index stood at 254 in January 2015, which is slightly higher than its January 2014 value of 248. This index measures the percent of the median-priced home that a household with median family income can purchased, given a 20 percent down payment and financing at current 30-year mortgage rates.

“We have really benefited from low mortgage rates,” said Theo, noting that over the past year, the 30-year fixed-rate mortgage fell 72 basis points to 3.71 percent in January. And while the national economy has been on a bit of a roller coaster this last year, the slower real GDP growth in the fourth quarter combined with the recent decline in energy prices probably reduces the likelihood of a rate hike by the Federal Reserve Board in the first half of 2015. “It’s always difficult to predict when mortgage rates will change, but rates are now less than a half percent higher than the 40-year low,” Theo said. Mortgage rates bottomed out at 3.35 percent in December 2012. “The bottom line is that this is an excellent time for qualified borrowers to get into the market, and using an experienced REALTOR^® remains one of the best ways for buyers to identify the best values in this market,” he said.