MADISON — The Wisconsin REALTORS Association released its September 2026 Real Estate Report recently, showing mortgage rates rose 0.5% over the last 12 months resulting in fewer home sales and moderating home price appreciation.

Existing home sales fell 2.4% in September relative to September 2025, and the median home prices rose just 1.5% to $342,000 over that same period. The average monthly 30-year fixed mortgage rate rose to 6.86% in September 2026, which is an increase of 51 basis points over the last 12 months. This is the highest mortgage rate since January 2025 when it reached 6.96%.

“September closed sales were down by 2.4% even as total listings and months of supply both improved over the last 12 months. The primary reason for reduced sales was rising mortgage rates, which softened buyer demand for existing homes,” said Amy Curler, 2026 Chair of the Board of Directors, Wisconsin REALTORS Association.

Tom Larson, President & CEO, Wisconsin REALTORS Association, said mortgage rates have reached their highest level since January 2025.

“If these trends continue, both buyers and sellers will be affected,” Larson said. “Specifically, lower affordability obviously hurts buyers, and higher rates also keep potential sellers from listing their homes because they don’t want to give up the very favorable rates locked in over the last six years.”

Dave Clark, Professor Emeritus of Economics and Wisconsin REALTORS Association Consultant, highlighted that the Fed recently increased the short-term Federal Funds Rate by 25 basis points and signaled that it will closely monitor progress on core inflation.

“While another hike at the October meeting of the Fed’s Open Market Committee is unlikely given its proximity to midterm elections, an increase at the December meeting would not be surprising if core inflation does not move downward. Lowering inflationary expectations is an important precursor to reducing mortgage rates,” Clark said.

Report highlights:

Mortgage rates rose about 0.5% over the last 12 months, resulting in fewer home sales and moderating home price appreciation. Existing home sales fell 2.4% in September relative to September 2025, and the median home price rose just 1.5% to $342,000 over that same period.

The average monthly 30-year fixed mortgage rate rose to 6.86% in September 2026, which is an increase of 51 basis points over the last 12 months. This is the highest mortgage rate since January 2025 when it reached 6.96%.

Year-to-date home sales rose 2.8% compared to the first nine months of 2025, and the statewide median price was up 6% to $346,500 over that same nine-month time span.

Although new listings fell 5.1% over the past 12 months, total listings rose 3.8% between September 2025 and September 2026.

On a year-over-year basis, months of supply improved 2.3% to 4.4 months of available supply in September. In general, months of inventory have been slowly improving since December 2022. In September, the tightest supply was found in the large metropolitan counties, which had just four months of supply. Smaller micropolitan area counties had slightly more inventory at 4.5 months of supply, and the rural counties had 6.1 months of available inventory. Six months of supply is considered a balanced market, so the more urbanized areas remain seller’s markets.

Housing affordability fell 5.5% over the past 12 months. Although the annualized change in median home prices only increased 1.5% in September, which is the slowest annual increase since June 2014, the combination of flat income growth and rising mortgage rates led to the erosion of housing affordability.