Mortgage interest rates are rising, and this could affect buyers and sellers of Barron County real estate in the months ahead. Here’s a look at what’s happening!
Inflation worries have rattled financial markets, spurring rates higher over the past six weeks. According to Freddie Mac, 30-year fixed-rate mortgages averaged a rate of 3.17% as of March 25, 2021. The good news is, rates are still lower than they were a year ago. The downside: rates climbed relatively fast after posting record-breaking lows, and they could rise further before leveling off.
For home buyers who have wiggle room in the budget, fractional rate increases won’t derail their plans. But as rates rise, buyers lose leverage, reducing the price range of homes they can afford.
With the inventory of Northwestern Wisconsin homes being lean in lower price ranges, any reduction in buying power is unwelcome. Eventually, some buyers will be sidelined as low inventory pushes up home prices, and higher rates squeeze purchase power.
Low inventory will keep sellers in the driver’s seat for a while. The exception could be expensive properties that have fewer qualified buyers as rates rise. A key metric to watch will be the days-on-market. When homes start taking longer to sell, it’s a signal that home price gains may slow down, too.
As we said in a prior blog post, sellers who are looking to lock in profits should take advantage of this market. Sellers who intend to buy another home with a mortgage should capitalize on today’s rates, rather than gamble with the uncertainties of the future.
Whether you are buying or selling, we can help! Six Lakes Realty is a locally-owned family business with over 40 years of experience. Our friendly, hometown service is just a call away!
John Flor CRS, GRI, ABR, RSPS, RRS, e-PRO
Team Lead / Property Marketing Specialist
Six Lakes Realty powered by Keller Williams Realty Diversified
Office: (715) 924-4806