Wisconsin REALTORS® Association: January 2025 Home Sales Report

January 2025 Home Sales Report

Tight Inventory Drives January Home Prices Higher and Keeps Sales Flat

Date: February 20, 2025

January 2025 at a glance

  • 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 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.

Additional analysis

Challenge of high prices

"Low inventories generated strong price pressure in every region of the state, but home price appreciation was especially strong in the more urbanized areas in 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.”

Chris DeVincentis, 2025 Chair of the Board of Directors, Wisconsin REALTORS® Association

Hopeful trends in home sales

“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.”

Tom Larson, President & CEO, Wisconsin REALTORS® Association

Inflation vs. recession risk

"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.” 

Dave Clark, Professor Emeritus of Economics and WRA Consultant

 

About the WRA

The Wisconsin REALTORS® Association is one of the largest trade associations in the state, representing over 17,500 real estate brokers, salespeople and affiliates statewide. All county figures on sales volume and median prices are compiled by the Wisconsin REALTORS® Association and are not seasonally adjusted. Median prices are only computed if the county recorded at least 10 home sales in the quarter. All data collected by the WRA is subject to revision if more complete data becomes available. Beginning in June 2018, all historical sales volume and median price data from 2015 forward at the county level have been re-benchmarked using the Relitix system that accesses MLS data directly and in real-time. Data prior to January 2015 is derived from the Techmark system that also accessed MLS data directly. The Wisconsin Housing Affordability Index is updated monthly with the most recent data on median housing prices, mortgage rates and estimated median family income data for Wisconsin. Data on state foreclosure activity is compiled by Dr. Russ Kashian at the University of Wisconsin-Whitewater. 

Note that the WRA employs a slightly different protocol to determine inventory levels than the protocol used by the REALTORS® Association of South Central Wisconsin (RASCW). For consistency, the summary tables for the South Central region reported in the WRA release employ the WRA approach. However, a modified table employing the RASCW methodology is available from the WRA upon request.

 

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