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Now that the housing market is finally calming down after the pandemic[1], buyers are facing a new challenge: Soaring mortgage rates.[2]
In Wisconsin, the average 30-year fixed mortgage rate is 5.58% — up from 2021's historic lows. This raises the average monthly mortgage payment to $1,232 (assuming a 20% down payment at the median home value).
But buying a home in Wisconsin is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.
In this guide, you’ll learn how to buy a house in Wisconsin with confidence no matter what the market brings. Learn why you can trust our advice.
Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.
Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.
Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Clever Real Estate. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!
Step 1: Save for a down payment
🔑 Key takeaway:
Your down payment can be less than 20% of the purchase price — $53,747 for the typical home in Wisconsin — but you'll have to purchase mortgage insurance and pay more interest over the life of your loan.
Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.
Typically, mortgage lenders in Wisconsin want you to contribute 20% of the purchase price as a down payment. That would be $53,747 for a $268,737 home — the typical home value in Wisconsin.
However, you have options to lower your down payment amount.
Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).
Mortgage type | Minimum down payment (%) | Down payment ($) |
|---|---|---|
VA Loan | 0% | $0 |
FHA Loan | 3.5% | $9,406 |
Conventional | 3% | $8,062 |
Based on typical home values from Zillow (August 2022) | ||
But making a down payment of less than 20% comes with some risks.
First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.
Down payment | Monthly payment | Total interest | Total Cost |
|---|---|---|---|
5% | $1,462 | $271,166 | $539,903 |
20% | $1,232 | $228,350 | $497,087 |
Based on home values from Zillow (August 2022) and a 5.58% interest rate for a 30-year loan. | |||
Second, you may have to purchase mortgage insurance.
Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.
Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.
VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.
» READ MORE: Everything you need to know about low-income home loans
Wisconsin down payment assistance programs
Low-income and first-time homebuyers may be eligible for one of Wisconsin's down payment assistance (DPA) programs. If you apply for a DPA program, you could receive a grant or second mortgage to pay for closing costs or a down payment.
Here are a few statewide resources you might qualify for:
WHEDA Easy Close DPA
The Wisconsin Housing and Economic Development Authority (WHEDA) offers its Easy Close DPA program to those with a WHEDA first mortgage. This option can give participants up to 6% of the home purchase price as a 10-year second mortgage.
The interest rate for the second mortgage is equal to the borrower's first mortgage interest rate. To qualify for the Easy Close program, buyers need to meet the same income and purchase price limits indicated in the WHEDA first mortgage requirements.
WHEDA Capital Access DPA
The WHEDA Capital Access DPA program offers participants up to 3.5% or $3,050 as a 30-year, 0% interest second mortgage. This option requires no monthly payments from borrowers.
Applicants need to stay beneath the maximum income and purchase price limits indicated for their county.
U.S. Department of Housing and Urban Development
You can find additional programs in Wisconsin on the state's HUD page.
Step 2: Find a great real estate agent in Wisconsin
🔑 Key takeaway:
Interview multiple agents to find one who knows your target neighborhoods, has experience in your price range, and communicates well.
Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Wisconsin.
Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:
- Years of experience
- Number of transactions in the last year (the more the better!)
- Experience in your price range
- Overall review score
- Individual reviews and complaints
Step 3: Get preapproved for a mortgage
🔑 Key takeaway:
Once you're preapproved for a mortgage, it's imperative that your financial situation doesn't change. If your credit drops, it can derail the process and keep you from closing on your house.
Here are some easy ways to ensure your credit doesn't change after you receive your preapproval letter:
- Avoid opening new credit accounts
- Don't close any accounts that have been open for a long time
- Make all of your credit card payments on time
» LEARN MORE: What factors do mortgage lenders consider?
A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.
Most sellers in Wisconsin will require preapproval before showing you their home.
You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Wisconsin home.
Step 4: Choose the right location
🔑 Key takeaway:
Search for neighborhoods where:
- Home prices are within your price range
- Home values are on the rise
- The local amenities support your lifestyle
Currently, the typical home value in Wisconsin is $268,737, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!
Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.
To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Madison:
Home value appreciation in Madison
Neighborhood | 2015 | Current | Appreciation |
|---|---|---|---|
Regent | $394,754 | $632,516 | 37.6% |
Greystone | $306,722 | $494,912 | 38.0% |
Marquette | $299,021 | $511,311 | 41.5% |
Step 5: Start house hunting in Wisconsin
🔑 Key takeaway:
Hunting for a house in Wisconsin might be a challenge right now, as prices are increasing and inventory continues to dip. If you’re set on buying in the state, temper your expectations and be flexible with your requirements. Keep an open mind to the listings that your realtor suggests — while they might not be what you initially wanted, you might find a decent listing that’s worth taking.
Searching for homes in Wisconsin is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.
Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."
Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.
Look at current housing inventory
The timing of your house hunt in Wisconsin can have a big impact on your number of options. For example, in Wisconsin, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.
On the other hand, December gives you the fewest choices in Wisconsin. Historically, there are 62.7% fewer homes for sale than during Wisconsin's peak season.
Housing inventory in Wisconsin by season
Season | New listings per month |
|---|---|
Spring | 8,860 |
Summer | 8,860 |
Fall | 8,860 |
Winter | 8,860 |
Step 6: Make an offer
🔑 Key takeaway:
The trends in Wisconsin’s market vary throughout the state — listings in more desirable areas tend to sell quicker, whereas those in more rural towns tend to sit for a bit longer. When making an offer on a house in the state, it’s best to follow your agent’s lead. They know your local market well and can give you good advice on how strong to make your offer or how fast you need to act.
Once you find a Wisconsin house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.
Currently, in Wisconsin, homes stay on the market for 74 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.
Historically, Wisconsin homes sell fastest in June, where the average property is only on the market for 55 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.
On the other hand, if you buy in February, you have a bit more time to search. Homes typically stay on the market 32 days longer than Wisconsin's annual average.
Average time homes spend on market in Wisconsin
Annual average | 74 days |
January | 99 days |
February | 97 days |
March | 74 days |
April | 58 days |
May | 53 days |
June | 52 days |
July | 53 days |
August | 60 days |
September | 64 days |
October | 68 days |
November | 77 days |
December | 89 days |
Based on data from Realtor.com (October 2022) | |
» LEARN MORE: What should an offer include?
Step 7: Inspections and appraisals
Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.
🔑 Key takeaway:
- Inspections: A licensed professional checks the house for any unseen, unexpected, or potential issues.
- Appraisals: An appraiser hired by your lender examines the house to determine how much it's worth.
Home inspections in Wisconsin
Having your Wisconsin home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.
Your inspector should check out the following parts of the property:
- Roof
- Foundation
- Electrical system
- HVAC system
- Plumbing
If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.
Wisconsin-specific inspections
Wisconsin law requires sellers to complete a disclosure form about their property, but it's possible for some issues to go undetected. Buyers are advised to have more than a general home inspection completed before closing on a home.
Although these specialized tests aren't required, they can reveal structural problems or other hazards to your safety. Prioritize your well-being by running these inspections:
- Radon testing: Consistent exposure to high levels of radon can cause long-lasting health complications. Buyers in Wisconsin are strongly recommended to do a radon test if the seller hasn't conducted one within the past year. Wisconsin residents can order a radon test kit online from the Wisconsin Department of Health services.
- Pest inspection: Pest and termite inspections are only mandatory in select Wisconsin counties, but all homebuyers should think about hiring a pest inspector. Termites and other unwanted critters can go unnoticed until they cause serious property damage, so it's a good idea to catch potential infestations early.
Appraisals
Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.
» LEARN: 3 options for buyers after a low appraisal
Step 8: Close on your new home!
🔑 Key takeaway:
Before you close on your new home, you and your agent will do a final walkthrough of the property to ensure that it's still in the expected condition.
To close on your Wisconsin home, you'll need to meet at the title company to sign some paperwork and settle your closing costs.
On the closing date, prepare to spend about an hour reviewing and signing legal documents for your loan application and title transfer. Take your time and read each page carefully to ensure that all of the information is correct.
Here are just a few forms you'll need to sign:
- Your final loan application
- The deed
- The mortgage promissory note
- The disclosure statements
After submitting your paperwork, you’ll settle your closing costs with the title company. The company will collect the total amount you owe and distribute the funds to the correct recipients on your behalf.
As a buyer, your closing costs will cover expenses in four key categories:
- Lender fees: Fees that your mortgage lender charges for underwriting and preparing your loan.
- Title and escrow charges: Fees the title company charges for conducting the title search and facilitating the closing process. Buyers and sellers often split this cost.
- Prepaid costs: Ongoing costs of owning a home, like property taxes and homeowners insurance. Mortgage lenders frequently require borrowers to pay for expenses like these up front.
- Other closing costs: Miscellaneous expenses that vary for each unique homebuyer. Common costs may include natural disaster certification fees or real estate attorney fees.
Buyers in Wisconsin typically pay 3–5% of the purchase price in closing costs. For a $268,700 home — the typical home value in Wisconsin — that's between $8,061 and $13,435!
Frequently asked questions
Wisconsin does not require you to hire a real estate attorney to buy a home. However, depending on your circumstances, you might consider hiring one anyways. If you do, treat the process similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs.
- Save for down payment
- Get pre-approved for a mortgage
- Choose your preferred Wisconsin neighborhoods
- Partner with the right real estate agent in Wisconsin
- Go house hunting
- Make a strong offer
- Inspections and appraisals
- Do a final walkthrough and close
No, but Alabama's Step Up program can provide down payment assistance to first-time homebuyers. Eligible buyers can receive a 10-year second mortgage of up to 3.5% of the sales price or up to $7,500, depending on the type of loan. Participants must complete a homebuyer education class to qualify.
Participants in the Step Up program cannot exceed the maximum income limit of $130,600. Those who earn 80% or less than the AMI (area median income) are eligible for the Conventional Step Up program. Both options require a credit score of 640 or higher.
Those who earn more than the 80% AMI but less than $130,600 can apply for the Freddie Mac Advantage Loan Product. This program requires a minimum credit score of 680.
Why trust us?
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We’ve earned buyers’ trust with a rating of 4.9 out of 5 start on Trustpilot and over 1,800 customer reviews.
Our team of industry-leading researchers are committed to making homeownership more accessible by educating buyers through guides like this one. We've spent thousands of hours analyzing publicly available data, surveying consumers, and interviewing industry experts. Our research has been featured in The New York Times, Business Insider, Inman, Housing Wire, and many more.
ARTICLE SOURCES[1]Federal Reserve. "Housing Market Tightness During COVID-19: Increased Demand or Reduced Supply?." Accessed October 11, 2022. Updated July 08, 2021.
[2]Consumer Protection Financial Bureau. "The Fed is raising interest rates. What does that mean for borrowers and savers?." Accessed October 11, 2022. Updated March 17, 2022.
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