Housing Supply Issues in Madison

In addition to the recent interest rate cuts proposed by the United States Federal Reserve, active real estate market agents in the state of Wisconsin were hoping that interest rates for their state would drop a bit more.

To determine the principal cost of a loan and the value of the interest rates to be paid, it is necessary to know the federal funds rate and government bond yields, as these indirectly influence the loan. Considering these factors and their current market value, many experts express optimism and expect mortgage rates to continue to decrease slightly until next year.

However, this is not the only turning point that real estate agents are handling, as they consider that, in addition to the rates, the market has a very scarce availability of housing that does not meet the needs of the state’s inhabitants, especially the residents of Madison, where the housing crisis is more noticeable.

The Madison real estate market has shown declines for many months in federal funds and mortgage loan rates, but apparently, this was not enough for potential buyers to activate the market, and now, little by little, they are returning.

The best market activation in Madison occurred in the winter months and during the Covid era when mortgage rates were at 2.75% and the purchasing power of the inhabitants was higher. During this stage, the city’s real estate agents experienced an increase in buyers eager to purchase homes.

Currently, as mentioned before, the biggest problem now facing the Madison real estate market is the current supply of affordable housing in the city. Without a variety of new housing constructions and the limited availability of older homes for sale, a blockage in commercial activity is generated.

As interest rates rise, many homeowners refuse to sell their properties to avoid having to assume the new rates on mortgage loans, leading to a stagnant market that lacks the mobility desired by both consumers and commercial agents.

Therefore, if the market does not have enough housing supply, sale prices will skyrocket, and purchasing options for residents will become increasingly scarce and difficult, not to mention the high costs of rates that further aggravate the commercial activity of the real estate sector.

In all this, it is clear that the Madison market, regarding housing, focuses its main problem on affordability and the scarcity of available homes.

Available foreclosures:

Madison: 12 homes available.

By Elias DaSilva | October 9, 2024.