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Tight supply of homes could hold back record sales

MADISON, Wis. (AP) — Sales of existing homes in Wisconsin are outpacing last year’s record purchases, but experts say the lack of inventory has tapped down the hot market.

The latest report from the Wisconsin Realtors Association shows 56,503 homes were sold between January and August. That’s an increase of 2.7% from the same period in 2020.

Marquette University economist David Clark releases the monthly home sales reports in conjunction with the association. Clark says the supply of homes, which has been declining for years, has constrained sales, Wisconsin Public Radio reports.

It also pushed home prices up 6.4% in August.

The economy overall remains in good shape for the housing sector, according to Clark.

“Mortgage rates are under 3 percent; that’s the fourth month of that being the case,” he said. “The state economy still has a pretty low unemployment rate, 3.9 percent. We also have a pretty high labor force participation rate.”

With the number of homes still declining, Clark said sellers are finding buyers very quickly.

“Average days on the market is 65 days,” he said. “That’s down from 88 in August of 2020, so realtors are moving homes at a relatively brisk pace.”

But can the market keep up that brisk pace for the rest of the year?

According to Clark, last year’s record might prove hard to break.

“The inventory problems are keeping us from selling more than we otherwise would,” he said.

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