The Walworth County real estate market remains competitive, particularly in the luxury and lakefront segments, but shows signs of stabilization and a slight slowdown compared to the rapid appreciation seen in prior years. The Lake Geneva market continues to attract affluent buyers from Chicago and beyond, driving demand for high-end properties. Increasing inventory is contributing to longer days on market for non-luxury homes. Overall, the market favors sellers in premium categories but is neutral for entry-level and mid-range properties, with year-over-year price growth cooling to more sustainable levels.
Nationally, the inventory of homes for sale rose +15.7% to 1.55 million homes, the highest inventory since the 2020 lockdown. The national average home price is $422,400, up 0.2% since 2024. US housing wealth is at a record high of $55.1 trillion, up $20 trillion since 2020. Foreclosures rose 18% year over year in a sign that some households may be under strain.
According to the Wall Street Journal, mortgage rates now average 6.35% on a conforming 30-year, fixed-rate loan, down from 7% in January. The Bureau of Labor Statistics issued one of the largest revisions in its history, reducing the number of jobs created in the last year by 911,000 jobs. This indicates that the economy has been much weaker than previously thought. Consequently, the Federal Reserve Open Market Committee lowered overnight banking rates by .25% on September 17. Core inflation remains at 3%, higher than the Fed’s target rate of 2%, but the obvious weakness in the job market outweighs those concerns. Jerome Powell, Chairman of the Federal Reserve, indicated that more cuts will come before the end of the year.
Once the Fed starts lowering rates, it will take time for that to influence mortgage rates. But if mortgage interest rates fall below 6%, experts project that the real estate market will improve. Sellers who are sitting on mortgages with pandemic low rates will have an incentive to sell. Lower rates will also make it easier for buyers to qualify.
The economy is hard to gauge as the usual indicators are mixed. In Q2, the Gross Domestic Product grew by 3.3%. Unemployment rose slightly to 4.3% with low job creation but limited job losses. Consumer sentiment is falling, and spending on durable goods has fallen. Economists predict that the full effect of tariffs have not yet been felt, and prices on imports and goods requiring imported raw materials for their manufacture will eventually add to inflation. Meanwhile, the stock market is making record gains.
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