Housing and Construction Table 11 National Affordability Index (Third Quarter)
Years
Median Price Existing Single Family Home
Mortgage Rate
Monthly P & I Payment
Payment as % of Income
Median Family Income
Qualifying Income
Composite
2022 Q3 2023 Q3
$389,600 $399,200
6.18 7.28
$1,905 $2,185
24.0 26.6
$95,280 $98,705
$91,440 $104,880
104.2
94.1
Description: • Composite Index measures affordability. An index of 150 means that a family earning the median family income has 150% of income necessary to qualify for a conventional loan covering 80% of a median price single-family home. Analysis: • Home affordability continues to decline as higher home prices and mortgage rates both contributed to higher mortgage payments. • The Federal Reserve’s sharp and rapid hikes in the Federal Funds rate (which impacts all interest rates) has perversely led to a double whammy of higher mortgage rates and a decline in supply of homes available for sale (which has fueled increases in home prices). • Many potential sellers are locked into the low interest rates on their existing homes and therefore unwilling to put their houses up for sale because they would have to pay a significantly higher rate on a new home. Table 12 Median Home Prices and Home Sales (Third Quarter 2023) Wisconsin Marathon Portage Wood 2023 Q3 % ∆ Yr. Ago 2023 Q3 % ∆ Yr. Ago 2023 Q3 % ∆ Yr. Ago 2023 Q3 % ∆ Yr. Ago Median Home Prices $299,000 8.7% $247,000 9.8% $269,474 10.7% $194,950 8.3% Home Sales 19,552 -18.2% 447 -9.5% 207 -10.0% 236 -16.9% Description: • Above table gives median home prices and sales for the state of Wisconsin and counties of Central Wisconsin. • If you list home prices from lowest to highest, the median home price is at the halfway point. Analysis: • We can see the impact of Fed policies by looking at median home prices and home sales in Wisconsin and the Central Wisconsin region. • The higher median prices and the sharp decline in home sales reflect a decrease in the supply of homes for sale as the result of rapidly increasing interest rates. Table 13 Residential Construction: Stevens Point - Plover Area (Third Quarter 2023) Permits Issued Number of Housing Units Estimated Value of New Homes (x1000) Alteration Permits Issued Estimated Value of Alterations (x1000)
2023 Q3
2022 Q3
2023 Q3
2022 Q3
2023 Q3
% ∆ Yr. Ago
2023 Q3
2022 Q3
2023 Q3
% ∆ Yr. Ago
25
25
37 $6,923.00 -23.6
454
472 $5,826.97 16.3
36
Description: • The above provides construction figures for both new homes and residential alterations. The above estimated values are in thousands of dollars. Analysis: • While the number of permits and housing units were almost identical to the number in Q3 2022, the value of estimated new homes fell by almost 24 percent. • Similarly the number or alteration permits was similar to Q3 2022; the estimated value of alterations, however, rose by 16 percent.
20
Center for Business and Economic Insight
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