Month: June 2021

Wisconsin Housing Market Strong Even as Inventories Remain Tight

Posted on June 22, 2021 by

Both existing home sales and median prices rose by double-digit margins in May compared to their levels 12 months earlier, when the economy was in lockdown. Housing supply remains very tight with just 2.8 months of available supply in the state. Inventory is tight in all regions, across all urban/rural classifications and across all price ranges

“Basic economics tells us that strong and growing demand in a world of tight supply is going to create significant price pressure, and that’s exactly what we’re seeing in the state housing market. Median prices through the first five months are up at an annual pace of 12.1%. Unless demand moderates or supply improves, neither of which is likely in 2021, we can expect to see more of the same price appreciation through the end of this year. The good news is that mortgage rates remain very low by historical standards, which has at least partially offset the impact of significant price pressure on housing affordability in the state.  Hopefully the inflationary pressures don’t intensify, which could cause mortgage rates to increase and lower affordability,” said Michael Theo, President & CEO of the Wisconsin Realtors Association.

 

Wisconsin Legislature’s Budget Committee Wraps Up with Massive Tax Cuts

Posted on June 18, 2021 by

Taking advantage of an unexpected revenue windfall, Republicans on the Wisconsin Legislature’s budget committee voted Thursday to approve about $3.4 billion in income, business and property tax cuts, wrapping up its work on the two-year spending plan.

The Republican plan would bring the state’s third income tax bracket down from 6.27%  to 5.3%, generating about $2.7 billion in relief. That bracket encompasses individuals making between $23,930 and $263,480 per year, and households earning between $31,910 and $351,310 per year.

Lawmakers set aside $202 million to offset a repeal of the state’s personal property tax which applies, in general, to furniture, equipment, machinery and watercraft owned by businesses. A portion of that tax — which provides funding to schools and local governments — was eliminated in the 2017-19 budget.

Committee co-chair Sen. Howard Marklein, R-Spring Green, noted that the tax is frustrating for those who pay it because it continues to apply every year — not just when the taxed item is purchased.

The motions passed Thursday also include a $72 million increase in aid to technical colleges and an additional $408 million for general school aid. They also remove a reduction in general school aid associated with some independent charter schools. Because spending caps remain in place, that funding would result in a decrease in property taxes. In total, the budget reduces property taxes by about $647 million.

The Republican tax measures are based on the idea that “taxpayers will do a better job, a more responsible job” than government would with the majority of the $4.4 billion more than expected that the state is projected to take in over a three-year period, said co-chair Rep. Mark Born, R-Beaver Dam.