Housing market seeing interest rates decrease, a good sign for Milwaukee home buyers

MILWAUKE (CBS 58) -- Although home prices are expected to stay relatively high, a Milwaukee economist and realtor say mortgages have been and are expected to continue to decrease -- a good sign for prospective new home buyers in Milwaukee.

Since the summer of 2022, new home buyers have had to deal with high home prices and high interest rates. In October, the 30-year fixed rate hit a high of 7.79%.

"Those were levels that we hadn't seen for several decades," said David Clark, economics professor and expert from Marquette University.

Clark said luckily in the last five weeks, mortgage rates have steadily been declining. He attributes that to inflation dropping to 3.1%.

"What that means is that the fed is likely, the Federal Reserve, is less likely to be increasing interest rates to slow down the economy," said Clark.

Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, said the current issue is that there are a lot of buyers but not enough units and homes available.

"Because of interest rates being so affordable for the last 10 years people who have a 3% interest rate now, if they want to move there's a disincentive to move because they're like, 'OK, I have to pay a 6% if I'm going to a different house,'" said Ruzicka.

Ruzicka expects that issue to improve over the next year which would help home price appreciation to moderate. The Association of Realtors said as of November, house prices were up 9.7%.

"So hopefully lower interest rates will encourage more people to list their house and it'll make it easier for people to construct new ones," said Ruzicka.

He suggests new home buyers to get talk to their realtors and get their ducks in a row in December to buy when homes open up in the Spring.