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Vilas home buyers struggle to find housing as prices vastly exceed income opportunities

County’s median home prices over 5 times higher than median income levels

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The dream of purchasing a home remains out of reach for many working families hoping to make Vilas County their permanent residence, even as interest rates are beginning to come down and building permit numbers are on the rise.
This can be attributed to a number of causes, but one of the main factors seems to be that the cost of housing has outpaced the income of many looking to live and work in the area. Other factors at play include high rental costs for families who are not in a position to purchase their own homes right now, as well as a lack of availability and high interest rates.
A report released last spring by Wisconsin Policy Forum (WPF) — a statewide nonpartisan, independent policy research organization — indicated that since 2017, home prices in Wisconsin have risen much faster than incomes.
Meanwhile, the median income among renters has kept pace with rising rental prices, though numbers show the share of renters spending more on housing than what is typically deemed affordable has grown.
WPF’s analysis shows the median sales price of homes in Wisconsin increased by more than half (53.3%) in just five years, from $172,900 in 2017 to $265,000 in 2022. During those years, the state’s median household income increased by only 19.7%.
Data gathered by the forum indicated that in 2022, median home sale prices in Vilas County were 5.33 times higher than the median household income — $339,950 vs. $63,726, respectively. Notably, according to WPF, rural counties like Vilas include a high proportion of homes used for recreational purposes.
Other counties where the median home sales price in 2022 was at least four times the median household income include Oneida, Iron, Florence, Barron and Washburn counties in northern Wisconsin. In Oneida County, the median home sales price was $265,000 compared to a median household income of $66,111 — a ratio of 4.01, WPF said.
WPF notes that a general rule used by many real estate agents is that homebuyers can afford to spend roughly 2.6 times their household income on a home.
“This divergence was particularly acute during the pandemic years, pushing the state’s price-to-income ratio to its highest point in data extending back to 2007,” WPF stated in its analysis. “While the median price of homes sold in Wisconsin was 3.3 times the state’s median household income in 2007, that ratio dropped to a low of 2.6 in 2011 as the Great Recession stifled the state’s economy and housing market. It then increased gradually to 3.1 in 2019 before jumping to 3.7 in 2022.”
Pandemic, interest rates still affecting market
WPF speculates a number of factors have caused the supply of homes on the market to decline and remain depressed for the past several years, reducing vacancy rates and pushing prices upward.
“The pandemic caused many existing homeowners to postpone or cancel plans to sell their homes. This trend accelerated in 2022 when mortgage rates shot up to their highest levels since the Great Recession, as lower interest rates on the mortgages on their current homes likely left many homeowners reluctant to sell,” WPF’s analysis said.
According to Freddie Mac, the 30-year fixed rate mortgage average rose from under 3% in 2021 to a peak of 7.8% in November 2023. Interest rates have cooled since then, but still remain high for many homebuyers.
Mary Jo Bowe, 2024 chair of the board of directors for Wisconsin Realtors Association (WRA), said the 30-year mortgage rate has clearly come down over the last year after it peaked at almost 8% at the end of October 2023.
“However, the rate has stayed in the upper 6% to low 7% range for much of this year (2024), and it averaged 6.8% in November. High mortgage rates create significant affordability problems for first-time buyers who rely heavily on financing to buy homes,” Bowe said.
A Wisconsin Housing Report, provided by the WRA in November, states that inventory of available homes remains very tight even as solid demand conditions persist. The mismatch between supply and demand is another factor that has limited sales growth and driven up home prices.
In the state, November existing home sales rose by a modest 1.7% compared to November 2023, and the median price rose 10.8% to $310,000 over that same 12-month period. On a year-to-date basis, home sales were up 4.1% compared to the January-through-November period in 2023, and the median price rose 8.8% to $310,000.
November sales varied across regions, with weaker sales in the northern part of the state.
According to the WRA, the housing market remains a strong seller’s market, with just 3.3 months of available supply — well below the six-month benchmark that characterizes a balanced market.
“Affordability remains a significant challenge, especially for first-time buyers who don’t have equity from the sale of an existing home to apply to a home purchase. Although 30-year fixed mortgage rates are more than a half percent lower than November 2023, they have been rising the last two months,” the WRA says.
The Wisconsin Housing Affordability Index shows the portion of the median-priced home that a buyer with median family income can purchase, assuming 20% down and the remaining balance financed with a 30-year fixed mortgage rate. The index fell 3.2% since November 2023.
Limited number of homes available
One specific challenge locally is the lack of single-family homes at an affordable price available for working families. With more individuals relocating to the area during the pandemic, and more of the existing properties being used as vacation rentals as opposed to full-time housing, home buyers are feeling the effects of the limited supply.
Vilas and Oneida counties saw limited growth in single-family home building permits through Quarter 3 (Q3) of last year according to data from the Wisconsin Builders Association (WBA). Final figures for 2024 have not yet been released.
Figures collected from July to September show that statewide, there was a 12.8% year-to-date increase in activity compared to the same period in 2023. Locally, Vilas County saw a 30.1% increase, while Oneida saw only 3.2% growth. The latest data is compiled of county-specific statistics through September for building permits submitted to the Wisconsin Department of Safety and Professional Services.
“A total of 10,203 (single-family) permits were reported through Q3 for 2024 compared to 9,049 permits during the same period in 2023, reflecting a 12.8% growth,” said WBA President Jim Doering. “Activity in just Q3 is up 1.5% compared to Q3 of 2023.”
According to the U.S. Department of Housing and Urban Development, Vilas County issued 256 single-family building permits in 2023, and 72 multi-family unit permits.
On a statewide level, WBA Executive Director Brad Boycks said he is pleased with the growth that has been seen thanks to more stabilized interest rates, increased awareness of the need of housing, and WBA’s work enacting pro-housing legislation and loan programs to support new construction projects.

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