Home sales across the state increased 6.1 percent in 2016 compared to 2015, making last year the strongest year for sales since 2005, according to the Wisconsin Realtors Association.
At the same time, median prices for the year rose to $165,000, a 5.9 percent increase over 2015.
The average inflation rate for 2016 was just 1.3 percent according to the U.S. Bureau of Labor Statistics.
“This has been a truly remarkable year for housing in the state with sales exceeding 81,000 units for the first time on record,” said Erik Sjowall, WRA board chairman.
The previous peak recorded using the current tracking system was last year when just over 76,000 homes were sold.
Comparing 2016 sales to the previous year, solid growth was seen in every region of the state. The highest sales were in the north region, which were up 7.8 percent. The southeast, which includes Milwaukee, Kenosha, Ozaukee, Racine, Sheboygan, Walworth, Waukesha and Washington counties, was up 7.2 percent.
Low inventory was a factor the entire year and supply continued to tighten through December where there was only 4.9 months of supply, which was the lowest level since WRA began tracking this figure in late 2009.
“There are several factors that have been pushing prices up, including tight inventories, but also a solid economy, favorable mortgage rates and a very low rate of foreclosure statewide,” said Michael Theo, WRA president and CEO.
Since the recession ended in mid-2009, non-farm employment increased by 197,600 jobs through the end of 2016, including 28,700 jobs created between December of 2015 and December 2016, according to WRA.
This has driven the statewide unemployment rate down to 4 percent which is at the level economists widely consider to be full employment. While mortgage rates began to move up in December following the Federal Reserve’s increase in short-term rates, they remain low by historical standards.
The 30-year fixed-rate stood at 4.2 percent in December, up from 3.96 percent at the end of 2015.
“These low rates have kept our affordability at high levels for creditworthy buyers,” Theo said.
Annual single-family foreclosures are down 19.4 percent in the last year, and they are down 69.8 percent from their peak 2009 levels, according to the WRA report.
