MADISON (WKOW) -- People shopping for new homes may have to settle for less, as the supply of houses drops in the area.
According to a new report from the Wisconsin Realtors Association, inventory of homes in for sale in September decreased almost six percent, as compared to September 2012. Fewer houses may mean some people may have to manage their expectations when it comes to looking for a new home.
"Especially for people who are very particular. Sometimes people have to settle for something a little less perfect than they were hoping to find," First Weber realtor Sherry Lessing said.
Lessing says that people aren't necessarily buying fixer-uppers, but homes that may need some renovations or updating.
"While inventories have tightened, which puts upward pressure on our prices, a steady supply of new listings has kept prices from accelerating too quickly," said Michael Theo, Wisconsin Realtors Association president and CEO.
Inventory levels are declined 18.7 percent over the last year, but new listings are up 12.6 percent over that same time frame.
The report also says sales were up nearly 16 percent in September, compared to the same time last year. Median prices also rose from $135,000 to $144,000, a jump of almost 7 percent. This is despite mortgage rates going up nearly a full percentage point compared to last year.
"When we see interest rates today at 4.5 percent, it's unbelievable. When I got into the business about 25 years ago, the interest rates were 13 or14 percent. When they came down below double digits, 9 percent, we all celebrated. They're so low," Lessing said.
Still, Lessing believes that the economy and people's job security has more of an influence on their willingness to buy new homes than the interest rates.
"I think the mortgage rates help, but I think people are just ready to own a home again. I think they've been renting for a while, or they've been uncertain about their jobs and the economy. They're starting to feel better about things," Lessing said, adding she believes mortgage rates will go up if they economy continues to improve.