Navigating the Milwaukee housing market requires more than just surface-level insights—it demands a clear understanding of current trends, economic factors, and future forecasts.

As one of the most dynamic real estate markets in the Midwest, Milwaukee presents opportunities and challenges for buyers, sellers, and investors alike.

In this comprehensive analysis, we’ll delve into key market trends, examine crucial statistics, and provide data-driven forecasts for 2024 and 2025.

Whether you’re planning to buy, sell, or invest, this guide will equip you with the insights and strategies needed to make informed decisions in Milwaukee’s evolving housing landscape.

Milwaukees’s Housing Market Overview

Milwaukee, with its rich history and cultural vibrancy, is a city that continues to attract residents, contributing to steady demand in the housing market and making it one of the best places to invest in real estate in the US.

However, this demand has not always been met with sufficient supply, leading to fluctuating prices and competition among buyers.

As of December 2024, the Milwaukee housing market continues to exhibit robust growth, with notable increases in home prices and sustained buyer interest.

• Median Home Sale Price: Approximately $250,092, reflecting an 8.7% increase from December 2023.
  
  
• Median Price per Square Foot: Around $180, indicating a rise in property valuations.
  
  
• Median Listing Price: Approximately $215,000, trending up 19.7% year-over-year.

The consistent appreciation in home prices, coupled with relatively swift sales, underscores Milwaukee’s appeal to both buyers and investors.

The increase in median listing prices suggests strong seller confidence, while the median days on market indicate sustained buyer demand.

Homes in Milwaukee typically sell for about 99% of their listing price, reflecting a balanced market where neither buyers nor sellers hold a definitive advantage.

Inventory Levels and Days on Market

One of the critical aspects of Milwaukee’s housing market in recent years has been its inventory levels.

As of December 2024, the Milwaukee housing market has experienced notable changes in inventory levels and the average time properties remain on the market.

Median Days on Market (DOM): Homes are typically selling after 44 days, a slight increase from 41 days in December 2023, indicating a marginal slowdown in market activity.

The slight increase in DOM suggests a modest shift toward a more balanced market, providing buyers with a bit more time for decision-making.

However, the significant rise in median home sale prices indicates that demand remains strong, potentially driven by limited inventory and sustained buyer interest.

This is a significant reduction from the 60-70 days seen a few years prior, indicating a quicker turnover and heightened competition among buyers.

The reduction in the number of days homes stay on the market is a clear indicator of the demand-supply imbalance, with demand slightly outpacing the available inventory.

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Interest Rates and Affordability

Interest rates play a pivotal role in the housing market, and Milwaukee is no exception.

In 2023, mortgage rates hovered around 6-7%, which, while higher than the historical lows seen in the previous decade, remained within a manageable range for many buyers.

This contributed to sustained demand, although affordability has become a growing concern for first-time homebuyers.

The median household income in Milwaukee is around $50,000, which, when combined with current mortgage rates, means that many households are spending a significant portion of their income on housing costs.

Milwaukee’s Rental Market Analysis

The rental market in Milwaukee also presents interesting dynamics, with rental prices gradually increasing over the past few years.

As of December 2024, the Milwaukee rental market exhibits the following average monthly rents:

• Studio Apartments: Approximately $958, reflecting a 2.4% increase over the past year.
  
  
• One-Bedroom Apartments: Around $1,547, also indicating a 2.4% increase year-over-year.
  
  
• Two-Bedroom Apartments: Approximately $1,962, with a 2.4% increase compared to the previous year.
  
  
• Three-Bedroom Apartments: About $2,362, marking a 2.4% rise year-over-year.

These figures suggest a stable rental market in Milwaukee, with moderate annual increases across various apartment sizes.

It’s important to note that rental prices can vary significantly depending on the neighborhood.

For instance, areas like Historic Third Ward have higher average rents, around $2,090 per month, while neighborhoods such as Harambee offer more affordable options, with average rents around $725 per month.

These prices reflect a steady increase, driven by both the demand for rental properties and the rising costs of property maintenance and taxes.

Factors Influencing the Milwaukee Housing Market

Understanding the factors that influence Milwaukee’s housing market is crucial for predicting future trends. Several key elements will likely continue to shape the market in 2024 and 2025.

Economic Conditions

Milwaukee’s economy significantly drives its housing market, with recent years showcasing a resilient and steadily growing local economy. The city’s unemployment rate, which hovered around 4% in mid-2023, indicates a healthy job market.

Sectors such as healthcare, education, and manufacturing have been the cornerstones of this growth.

For instance, the healthcare sector, anchored by institutions like Aurora Health Care and Froedtert Health, employs thousands and continues to expand, thereby attracting a skilled workforce to the area.

However, Milwaukee also grapples with economic disparities that impact housing demand and affordability. Income inequality remains a pressing issue, with the median household income at approximately $50,000, well below the national median.

This disparity creates a divided housing market where high demand and rising prices in more affluent neighborhoods contrast with affordability challenges in lower-income areas.

The ongoing economic diversification efforts, including investments in tech startups and infrastructure, could either alleviate or exacerbate these disparities depending on their execution and reach.

In addition, inflation and interest rate fluctuations play a critical role. With mortgage rates expected to stay around 6-6.5% through 2025, homebuyers will face higher borrowing costs, potentially cooling the market slightly, particularly for first-time buyers and those on the edge of affordability. H

However, the local economy’s strength, combined with job creation, is likely to sustain a stable demand for housing, particularly in sectors where wage growth is consistent.

Population Growth and Demographics

Milwaukee’s population dynamics are another significant factor influencing the housing market. The city’s population, currently estimated at around 577,000, has seen modest growth, primarily driven by an influx of younger professionals and families.

This demographic shift is pivotal in shaping housing demand, with a noticeable preference for single-family homes and modern, amenity-rich apartments.

Milwaukee has also seen growth in its immigrant population, which has contributed to the cultural diversity of neighborhoods and created demand for various types of housing.

Neighborhoods like Bay View and Riverwest have become popular among younger, more diverse populations, driving up property values and fostering new residential developments.

The aging baby boomer population is another demographic trend impacting the market. As more boomers reach retirement age, there is a growing demand for downsized, low-maintenance living spaces such as condos and townhouses.

This trend is expected to continue, leading to increased demand for multifamily housing options and possibly driving up prices in this segment.

New Construction and Development

New construction in Milwaukee has been both a response to and a factor in the city’s housing market dynamics. In recent years, the city has seen several significant residential developments, particularly in and around downtown Milwaukee.

These projects, including high-rise luxury condos and mixed-use developments, cater to the growing demand for urban living.

Despite these developments, the pace of new construction has not kept up with demand, especially in the single-family home segment. As of 2024, Milwaukee has a housing inventory that could only sustain about three months of demand, well below the six-month benchmark that signifies a balanced market.

The shortage of new housing is partly due to rising construction costs, driven by supply chain disruptions, increased material prices, and labor shortages. For example, the cost of lumber, which spiked during the pandemic, has yet to return to pre-pandemic levels, further straining builders’ budgets.

Developers also face regulatory challenges, including zoning laws that limit where and how much they can build. In some areas, outdated zoning laws have restricted the density of new developments, slowing the addition of much-needed housing units.

To mitigate these challenges, developers are increasingly focusing on smaller, infill projects that can bypass some of the regulatory hurdles while still meeting the growing demand for urban housing.

The lack of affordable housing development is another critical issue. While there have been initiatives to encourage the construction of affordable housing units, progress has been slow.

Many developers prefer building high-end properties that offer higher profit margins, leaving a significant gap in the market for low- to middle-income households.

Government Policies and Incentives

Government policies at both the state and local levels will continue to play a crucial role in shaping Milwaukee’s housing market through 2025.

Recent initiatives by local government have focused on increasing the availability of affordable housing, providing incentives for first-time homebuyers, and streamlining the permitting process for new developments.

For instance, Milwaukee’s inclusionary zoning policies, which require developers to include affordable units in new projects, have had some success in increasing the availability of lower-cost housing options.

However, these policies have also faced pushback from developers, who argue that such requirements make projects less financially viable. The city has responded by offering tax incentives and subsidies to developers willing to include affordable units, though the effectiveness of these measures has been mixed.

Property taxes in Milwaukee are another significant factor affecting the housing market. Milwaukee has one of the highest property tax rates in the state, which can deter potential homebuyers and put pressure on existing homeowners, especially those on fixed incomes.

In response, there has been ongoing debate about property tax reform, with some proposals suggesting shifts towards income-based taxes or increasing state funding to reduce the reliance on property taxes.

State-level policies, such as those governing mortgage interest deductions and homebuyer assistance programs, also impact the market.

The Wisconsin Housing and Economic Development Authority (WHEDA) offers programs that provide down payment assistance and favorable loan terms for first-time buyers, which has helped maintain demand despite rising home prices and interest rates.

Milwaukee Housing Market Forecast (2024 – 2025)

Now that you’ve established the current landscape and the factors at play, it’s time to turn your attention to the forecast for the end of 2024 and 2025.

Predicting the future is always a bit like gazing into a crystal ball, but with the right data and trends, you can make informed projections.

Home Prices Forecast

Milwaukee’s home prices are expected to continue their steady upward trajectory over the next two years. As of mid-2024, the median home price in Milwaukee hovers around $219,000.

By the end of 2025, anticipate this figure to climb closer to $260,000 to $270,000, reflecting an annual growth rate of approximately 4-5%.

This gradual increase contrasts with the more rapid price escalation witnessed in the early 2020s when post-pandemic demand surged, leading to double-digit annual growth rates in some markets.

The expected price increase will be fueled by several key factors. Persistent demand, particularly from younger professionals and families, will continue to put pressure on the market. Also, limited inventory remains a significant challenge, as the number of homes available for sale does not keep pace with demand.

In addition, inflationary pressures on construction costs—due to rising labor costs, material prices, and supply chain disruptions—will also contribute to the upward pressure on home prices.

Notably, the market will see variations in price growth depending on the type of property and location. Single-family homes in desirable neighborhoods like Bay View and Wauwatosa may experience above-average price increases, driven by their popularity among families and first-time buyers.

Meanwhile, areas further from downtown or those undergoing revitalization may see more modest price gains.

Inventory and New Construction

The inventory situation in Milwaukee is expected to see slight improvements, although it will remain tight compared to historical norms.

By the end of 2025, the housing market may see a small increase in the number of homes available for sale, with months of supply potentially rising to around 3.5 months, up from the current 3 months.

This remains below the 6-month supply level that typically signals a balanced market, indicating that Milwaukee will continue to favor sellers over the next two years.

New construction will play a critical role in shaping the inventory landscape. Recent trends show a slow but steady increase in building permits, particularly for suburban developments where land is more readily available.

In 2023, Milwaukee issued approximately 1,500 building permits for new residential units, a slight increase from the previous year. This trend is expected to continue, with 2024 and 2025 seeing further modest gains in new construction activity, particularly in suburbs like Brookfield and Waukesha.

However, new construction will likely fall short of fully meeting demand. Challenges such as high land costs, regulatory hurdles, and labor shortages will continue to constrain the rate at which new homes are built.

Consequently, even with increased construction, the days on market for existing homes will remain low, likely around 30-35 days, as buyers quickly move to secure properties.

Interest Rates and Affordability

Interest rates will play a crucial role in Milwaukee’s housing market over the next two years. In 2022 and early 2023, mortgage rates rose sharply from historic lows to around 6-7%.

The market has since adjusted to this new normal. For 2024 and 2025, mortgage rates are expected to stabilize between 6-6.5%.

However, short-term fluctuations could happen due to inflation or Federal Reserve policies.

This stabilization may ease some pressure on buyers. However, affordability will still be a major concern, especially for first-time buyers.

With Milwaukee’s median household income at around $50,000, many buyers will find that mortgage payments, property taxes, and insurance costs stretch their budgets.

As a result, more buyers may look for smaller, more affordable homes or condos as their first purchase.

Programs for first-time buyers, like those from the Wisconsin Housing and Economic Development Authority (WHEDA), will be vital.

These programs offer down payment assistance and favorable loan terms. They help make homeownership more accessible to a broader group of people.

Milwaukee’s Rental Market Forecast

Milwaukee’s rental market will grow steadily through 2025. Strong demand and rising homeownership costs drive this growth.

In 2024, renters pay about $1,500 per month for a one-bedroom apartment and around $1,900 for a two-bedroom.

These rents will likely rise by 2-4% annually, reaching $1,570 for a one-bedroom and $1,950 for a two-bedroom by the end of 2025.

Several factors push this trend. First, higher home prices and mortgage rates lead some buyers to delay purchasing homes. Many, especially younger residents, prefer renting because it offers flexibility and proximity to downtown amenities.

Second, developers have not kept the supply of rental units in line with demand. New developments, especially downtown, often target higher-end markets, leaving a gap in affordable rental options. This imbalance continues to push rents higher.

Third, inflation raises costs for property maintenance, utilities, and insurance. Landlords will likely increase rents to cover these rising expenses.

Investors in the rental market can expect steady returns, especially in neighborhoods experiencing growth and revitalization.

However, they should prepare for increased regulatory scrutiny as local governments consider measures like rent control or enhanced tenant protections to address housing affordability.

Neighborhood-Specific Analysis

Milwaukee is a city of neighborhoods, each with its own unique characteristics and housing market dynamics.

Let’s take a closer look at some of the key neighborhoods and what you can expect in 2024 and 2025.

Downtown Milwaukee

Downtown Milwaukee has seen significant development in recent years, with new high-rise apartments and condos catering to young professionals and empty nesters.

The area is likely to continue its growth, with increasing demand for luxury apartments and condos. Home prices and rents in downtown Milwaukee are expected to rise faster than the city average, driven by limited space for new development and strong demand for urban living.

Bay View

Bay View is one of Milwaukee’s trendiest neighborhoods, known for its vibrant arts scene and eclectic mix of restaurants and shops.

This neighborhood has become increasingly popular with younger buyers and families, leading to rising home prices and rents.

Expect this trend to continue, with Bay View remaining one of the hottest neighborhoods in Milwaukee. Home prices here could increase by 5-7% annually through 2025.

Wauwatosa

Wauwatosa, a suburban area just west of Milwaukee, offers a mix of suburban tranquility and urban convenience. It’s particularly popular with families due to its good schools and parks.

The housing market in Wauwatosa is expected to remain competitive, with steady demand for single-family homes.

Prices are likely to rise by 4-6% annually, driven by the neighborhood’s strong appeal to families and proximity to downtown Milwaukee.

East Side

The East Side is another popular area, known for its historic homes and proximity to Lake Michigan. This neighborhood attracts a mix of students, professionals, and retirees.

The market here is expected to remain strong, with modest price increases of 3-4% annually. The East Side offers a mix of investment opportunities, from rental properties catering to students to luxury homes near the lake.

Challenges and Risks of Milwaukee’s Housing Market

No housing market analysis would be complete without acknowledging the potential challenges and risks. Milwaukee’s housing market, while robust, is not without its potential pitfalls.

• Economic Uncertainty: Broader economic conditions like inflation, job market fluctuations, and possible economic downturns could impact the Milwaukee housing market.
  
  A significant economic slowdown may decrease demand, especially for higher-priced homes, and slow down the rate of price increases.
  
  
• Affordability Crisis: Affordability remains a major concern, particularly for first-time buyers and lower-income households. If home prices continue to rise while incomes stay stagnant, Milwaukee could face an affordability crisis.
  
  This scenario might increase demand for rental properties and potentially cool down the homebuying market.
  
  
• Supply Chain Issues and Construction Costs: Ongoing supply chain disruptions and rising construction costs continue to affect new housing development. These issues, if they persist, could limit the number of new homes entering the market.
  
  This would worsen the inventory shortage and drive up prices further.
  
  
• Policy Changes: Changes in government policies, such as new taxes, zoning laws, or regulations, could significantly impact the housing market.
  
  While some policies aim to increase affordability or encourage new construction, they could also have unintended consequences that disrupt market dynamics.
  
  

Is It Worth Buying A Property In Milwaukee?

Yes, Milwaukee is a great opportunity to buy and invest in affordable properties!

The Milwaukee housing market is poised for continued growth in 2024 and 2025, with rising home prices, increasing demand, and ongoing inventory challenges.

As a buyer, it’s essential to be prepared for a competitive market, with careful budgeting and a willingness to act quickly when the right property comes along.

As a seller, you can expect strong demand but should be mindful of pricing your home competitively to attract buyers in a market with rising interest rates.

For investors, Milwaukee’s housing market offers opportunities in both the rental and homebuying markets, but success will require careful market analysis and a focus on neighborhoods with strong growth potential.

As always, staying informed about market trends and economic conditions will be key to making smart real estate decisions.

Milwaukee’s housing market offers a mix of challenges and opportunities, but with the right approach, 2024 and 2025 can be years of growth and success for buyers, sellers, and investors alike.

Whether you’re looking to buy your first home, sell a property, or invest in Milwaukee real estate, understanding the market dynamics will be crucial to achieving your goals.

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