HOME SALES CONTINUE TO DECLINE ACROSS WISCONSIN FOR THE FIFTH STRAIGHT MONTH. THIS AS THE FEDERAL RESERVE RAISED INTEREST RATES BY A QUARTER PERCENTAGE POINT WEDNESDAY, SIGNALING THE CONTINUED CONCERN OVER INFLATION. NEW DATA JUST OUT FROM THE WISCONSIN REALTORS ASSOCIATION SHOWS HOME SALES FALLING ABOUT 28% STATEWIDE COMPARED TO A YEAR AGO. THE MOST DRAMATIC DROP, ABOUT 40% HAPPENING IN NORTHERN WISCONSIN AND THE REST OF THE STATE DROPPING ANYWHERE BETWEEN 22 AND 35%, INCLUDING A NEARLY 28% DECLINE IN SOUTH EAST WISCONSIN. OH, THIS IS MEDIAN HOME PRICES CONTINUE TO CLIMB, JUMPING NEARLY 12% STATEWIDE FROM A YEAR AGO TO ABOUT. $262,500 ACROSS WISCONSIN, PRICES INCREASED ANYWHERE BETWEEN SIX AND A HALF PERCENT IN THE WESTERN PART OF THE STATE TO 20% IN NORTHEAST WISCONSIN, INCLUDING AN EIGHT AND A HALF PERCENT INCREASE IN SOUTHEAST WISCONSIN. DAVE CLARK IS AN ECONOMIST AT MARQUETTE UNIVERSITY AND CONSULTANT FOR THE WISCONSIN REALTORS ASSOCIATION. DAVE, GOOD TO SEE YOU. THANKS FOR YOUR TIME. I’M HAPPY TO BE HERE. LET’S FIRST TAKE A STEP BACK AND GIVE ME A SNAPSHOT OF THIS NEW REPORT. WHAT ARE YOUR BIG TAKEAWAYS FROM THESE NEW NUMBERS WE’RE SEEING? WELL, ONE OF THE THINGS THAT THAT WE’RE SEEING IS THE PRICE PRESSURE THAT WE SAW REALLY IN THE FIRST HALF OF 2022, WHICH TENDED TO BE IN IN THE 10 TO 11% RANGE. WE’RE SEEING THAT AGAIN IN THE BEGINNING OF 2023, WHICH SEEN SOME SOFTENING ACTUALLY IN THE FOURTH QUARTER, SOFTENING MEANING THE PRICE APPRECIATION WAS HAD MODERATED. IT HAD BEEN IN THE ON A YEAR OVER YEAR BASIS, HAD BEEN IN THE FIVE, 6% RANGE. AND NOW WE’RE WE’VE SEEN IT SEEN IT REALLY, REALLY INCREASE. WHAT WE SAW IN THE EARLY PART OF 2022. WE DO KNOW THAT TYPICALLY HOME SALES TEND TO SLOW DOWN IN THE WINTER MONTHS. BUT ACCORDING TO THIS NEW DATA FROM THE WISCONSIN REALTORS ASSOCIATION, WISCONSIN WINTER HOME SALES WERE DOWN AT THEIR LOWEST LEVEL IN 11 YEARS. YOU MENTIONED THE INVENTORY BEING LOW, BUT DEMAND IS HIGH. WHAT’S THE OUTLOOK HEADING INTO THE SPRING AND SUMMER? I THINK THAT THE TIGHT INVENTORIES ARE GOING TO CONTINUE TO AFFECT OUR SALES. THE PROBLEM IS NOT ON THE DEMAND SIDE. THE PROBLEM IS THAT THERE SIMPLY ARE NOT A LOT OF HOMES FOR AVAILABLE FOR SALE. SO YOU HAVE TOO MANY BUYERS CHASING TOO FEW HOMES. AND SO, YOU KNOW, I THINK THIS IS GOING TO BE A TOUGH YEAR FOR SALES UNTIL THE INVENTORY SCENARIO IMPROVES. LET’S TALK ABOUT THE SIDE IN THE BANKS AND HOW ALL OF THIS PLAYS INTO THE HOUSING MARKET. THE FED’S RAISING THE INTEREST RATE AGAIN. DID THIS PAST WEEK. HOW CONCERNED SHOULD WE BE ABOUT A POTENTIAL RECESSION? WELL, CERTAINLY THE RISK OF A RECESSION HAS INCREASED. SO IT’S BEEN INCREASING FOR A WHILE. IT’S A TIGHT LABOR MARKET. I THINK THE RISK OF OF A RECESSION IS IS DRIVEN MORE BY THE THE RISK THAT THAT EXISTS ON THE FINANCIAL SIDE OF OF THE ECONOMY. WE SAW THAT THE FAILURE OF SILICON VALLEY BANK AND WE’VE SEEN A COUPLE OF OTHER OTHER FAILURES. THIS HAS PUT THE FED IN KIND OF A TIGHT SPOT NOW WITH ALL THAT. ALL OF THAT SAID, YOU MENTIONED THE FAILURE OF TWO U.S. BANKS IN RECENT WEEKS. SILICON VALLEY BANK AND SIGNATURE BANK AS WELL. THE FED BEING IN THIS POSITION WHERE THEY’RE RAISING INTEREST RATES TO TRY TO GET A HANDLE ON INFLATION. SHOULD WE BE CONCERNED ABOUT MORTGAGE PRICES, HIGHER MORTGAGE RATES, AND EVEN A TIGHTENING ON LENDING? SO I DON’T THINK THAT THAT’S AS MUCH A CONCERN. SO SO DO MORTGAGE RATES RESPOND TO SHORT TERM INTEREST RATES? THEY DO. BUT BUT BUT REALLY, WHAT WHAT’S EMBEDDED IN MORTGAGE RATES IS THE INFLATIONARY EXPECTATIONS. SO IF WE CAN CONTINUE TO MAKE PROGRESS ON THOSE AND ON THOSE INFLATIONARY NUMBERS, THAT WILL REDUCE THE LIKELIHOOD THAT WE’RE GOING TO SEE SIGNIFICANT SPIKES IN MORTGAGE RATES. WE’VE SEEN MORTGAGE RATES ACTUALLY COME DOWN OVER THE COURSE OF THE LAST SEVERAL MONTHS. I MEAN, THERE ARE CERTAINLY A LOT HIGHER THAN THEY WERE THIS TIME LAST YEAR, FEBRUARY OF LAST YEAR. THEY WERE JUST AROUND 3.8%. THEY’RE AT ABOUT 6.3% IN FEBRUARY OF THIS YEAR. BUT BUT, BUT BUT THEY HAVE COME DOWN SINCE PEAKING IN NOVEMBER. DAVE CLARK, A MARQUETTE UNIVERSITY ECONOMIST AND A CONSULTANT WITH THE WISCONSIN REALTORS ASSOCIATION, THANKS FOR YOUR TIME. THANK YOU. COMING UP, THE DEMANDS TO TESTIFY ON CAPITOL HILL. THE LATEST FROM NEW YORK TO WASHINGTON. ALL EYES THIS WEEKEND ON FORMER PRESIDENT DONALD TRUMP AND MANHATTAN’S DISTRI