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.
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.
“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
