Wisconsin Realtors Hopeful Mortgage Rates Will Decline Slightly Through 2025
Wednesday, September 25th, 2024 -- 11:01 AM
(Joe Schulz, Wisconsin Public Radio) Some Wisconsin realtors are hopeful mortgage rates will decline slightly through 2025 after the Federal Reserve’s interest rate cut last week.
But, according to Joe Schulz with Wisconsin Public Radio, they say a lack of supply remains the biggest challenge for prospective homebuyers. The Fed cut the Federal Funds rate by half a percentage point last Wednesday, but average 30-year fixed mortgage rates have been trending down since they peaked in October 2023.
The Federal Funds rate is essentially the rate at which banks lend money to each other and serves as the base cost for loans, according to Laura Stanfield, a residential mortgage specialist at Wintrust Mortgage in Madison who spoke to WPR’s “Wisconsin Today” on Monday.
She said the Federal Funds rate has an indirect effect on mortgage rates, which came down in anticipation of the Federal Reserve’s cut. There’s hope another federal rate cut could come in November. But mortgage rates are also affected by yields from government bonds.
Nationally, average 30-year fixed rate mortgages peaked at 7.79 percent in October 2023, and were down to 6.09 percent as of last Thursday, according to data from the Federal Reserve Bank of St. Louis.
Jenelle Bruno, sales manager and managing broker for First Weber Realtors-Fond du Lac, said some buyers were sidelined in late 2023 and early 2024 because mortgage rates were higher than they were anticipating.
“There were a number of buyers who decided to sit out of the market for a little while, and they’re starting to trickle into the market a little more willingly,” she said. “We anticipate that will keep happening, but we’re not going to see a big rush.”
When mortgage rates went below 3 percent during the pandemic, Wisconsin realtors said they had a rush of people trying to buy homes all at once. “It supercharged the market, no question, because your purchasing power is greatly increased when you have a 2.75 percent interest rate versus a 6.8 percent interest rate,” Bruno said.
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