Report: Metro area homes remain affordable
Reasons given include low interest rates, small price increases

By Dwayne Butler - Freeman Staff

Oct. 28, 2014

 A house for sale in the 1400 block of Atlantic Drive in Waukesha.  
Charles Auer/Freeman Staff

BROOKFIELD - The metro Milwaukee area continues to offer many single-family homes that can be purchased with monthly payments that rival or beat rental payments, according to the North Shore Bank/Greater Metropolitan Association of Realtors’ Home Affordability Report.

The report, for the quarter ending Sept. 30, shows median monthly payments ranging from a low of $247 per month for a $27,000 home on the west side of Milwaukee to a payment more than 13 times higher - $3,254 - on a $655,000 home in Mequon.

Published quarterly, the report uses Metro Listing Services’ data to track the current median monthly payment (principal, interest, and property taxes) for single-family homes that were purchased in three price ranges - lower end, middle market and upper end - during the previous quarter in municipalities where enough recent home sales took place to compute reliable figures.

The figures are based on the median selling price of homes sold during the previous three months in each of the three price ranges, the current average interest rate on a 30-year, fixed rate mortgage and the property tax rate in the featured community.

The analysis assumes a 20 percent down payment, which eliminates the need for mortgage insurance and results in a smaller monthly payment than lesser down payments.

Waukesha ranged from a low monthly payment of $744 on a $137,900 home to a high of $1,491 on a $280,000 home. Brookfield had a low of $1,046 on a $199,950 home to a high of $2,264 on a $433,950 home.

Oconomowoc had a low of $838 on a $165,450 home to a high of $1,922 on a $379,450 home. Pewaukee had a low of $623 on a $116,750 home to a high of $2,025 on a $405,500.

Michael Kellman, a senior vice president at North Shore Bank who oversees mortgage lending, said conditions are favorable for buyers thanks to a combination of low interest rates and little price inflation.

“The current average interest rate on a 30-year, fixed-rate mortgage is 4 percent and the average home sale price in the metro area rose by just 1.1 percent over the past year,” he said. “It’s a very attractive environment for homebuyers.”

Shorewest real estate agent Beth Jaworski said in many parts of the metro area, “It’s really is less expensive to own than to rent, at least when looking at monthly payments.” Owners incur maintenance costs that renters don’t but also benefit from mortgage interest tax deductions and any gains in the value of their homes, she added.

Coldwell Banker agent Kathy Domagalski said a stronger, more stable housing market is encouraging lenders to ease up on mortgage loan requirements.

“It was reported that some of the additional requirements that lenders put in place a few years ago are likely to be lifted, which will make buying a home much easier than it had been,” she said.

Jaworski agreed.

“I think a lot of borrowers in the lower price ranges have been scared off by media accounts of how hard it is to get a mortgage,” she said.  “Generally speaking, it isn’t nearly as difficult as people imagine, especially if you’re working with a local lender.”