How will Inflation and Rising Interest Rates Affect the Housing Market in Eau Claire?

Oct 29, 2022

What is the average inflation rate? Can I buy a home with inflation on the rise?

The annual U.S annual inflation rate was at 8.2% last month. Wisconsin’s inflation rate was much lower than the national average at 6.2%. The lower inflation rate makes Wisconsin an attractive place to live. Further Eau Claire’s cost of living continues to be below the national average. This affordability makes Eau Claire County and Altoona an attractive place to live long term. 

Rise in Interest Rate

The Federal Reserve has increased the interest rates to combat inflation. This means that monthly payment on a same home will be significantly higher. Further, Feds are likely to continue to increase the interest rates in 2023. Now is the time to buy a home in order to avoid higher monthly payments due to higher interest rates. 

Will Home Prices Decrease Next Year?

During the pandemic, home prices in the country have increased significantly. So will the Eau Claire housing market pop in 2023? Most experts think the housing market will cool but there will not be a ‘popping’ of the market like we saw in the 2007 recession. Many homeowners have much more equity in their homes, they have better qualifications, and lenders have much stricter underwriting. With recession as a primary factor, there are many predictions. Here are a summary of some predictions on national home prices for 2023:

Wells Fargo: Decrease over 5%

Capital Economics: Decrease by 8%

Zillow: Increase by 1%

CoreLogic: Increase by 3%

Fannie Mae: Moderate increase


How about the Eau Claire Housing Market?

During the pandemic, Eau Claire saw a big increase in home prices. The price increase from the national perspective, however, shows that the increase was not as significant as some other markets. Home price increase Eau Claire MSA ranked 139 out of 269 metropolitan areas. This means that Eau Claire Market was not an over-inflated market. Thus even if home prices decrease, it will not be as significant as some other markets. 


So Should I Wait to buy or Should I Buy in Eau Claire now?

This will of course depend on your personal and financial situation. The housing market is changing fast and constantly, so it’s impossible to give advice that will be 100% correct. 

Here is OUR opinion. If you can comfortably afford a home, this is not a bad time to buy a home in Eau Claire. We think the inflation will continue (though at a lower rate) and home prices will only have moderate change in Eau Claire. With interest rate increase, your monthly payment will be more if you wait till next year. We also believe that home purchase is a long term investment. You will experience short-term ups and downs of the home prices. Even if there is a decrease in the price, over the long term, it will most likely increase in value. Further, if you are happy living in your new house, it’s worth a lot.




Current US Inflation Rates: 2000-2022

2022 Wisconsin Employment Numbers

Change in FHFA Metropolitan Area House Price Indexes

Cost of Living in Eau Claire

Where is the housing market headed in 2023? Here are the predictions