MADISON — Sales of existing homes turned down sharply in June, which is traditionally the strongest month of the year for home sales, while prices continued to rise at well above the rate of inflation, according to the latest analysis of the housing market by the Wisconsin Realtors Association. 

June home sales fell 9.7% relative to June 2018, and the median price rose 10.3% to $215,000 over that same 12-month period. Comparing the first half of 2019 to that same period in 2018, sales dropped 5.1 percent, and the median price rose 7.7 percent to $195,000. The strong demand for housing was fueled in part by record-setting low unemployment rates of just 2.8% for both April and May.  Although inventories do tend to rise during the peak sales periods, Wisconsin’s seller’s market continued in June, with just five months of supply. This was only slightly lower than June 2018 when inventories stood at 5.1 months. Counties with smaller towns and cities, which the U.S. Census defines as micropolitan areas of 10,000 to 49,999 persons, had relatively balanced markets with 5.8 months of available supply. Finally, the small rural counties had the most supply at 8.6 months and would be considered a buyer’s market. 

Since January 2016, the year-over-year sales growth has ranged between minus 12.2% in December 2018 and 23.3% in November 2016. In contrast, prices have increased at an annual pace ranging from 3.2% in May 2016 to a high of 10.3% in June of this year. In fact, the statewide median price exceeded $200,000 for the first time on record in May, and that continued in June. It should be noted that WRA records date back to January 2007. Moreover, three of the six regions of the state were above that benchmark in June. The highest-priced region was the South-Central region where the median price was $260,250. The median price was $230,000 in the Southeast region and $205,000 in the West. The Wisconsin Affordability Index represents the fraction of the median-priced home that a buyer with median family income can afford to buy, assuming a 20% down payment and the remaining 80% financed through a 30-year fixed-rate mortgage at current rates. The index slipped from 189 in June 2018 to 185 in June of this year. The last time mortgage rates were below 4% was June 2017, and it stood at 3.8% this past June. 

The economic expansion has now moved into its 11th year, which makes this recovery the longest in post-war history.