While most of us have turned our attention to how is it possible that we had snow on Halloween and trying to determine if this is Wisconsin’s “new normal” for weather, the real estate market in Dane County is seeing few signs of cooling off. Some of the themes of 2018 repeated themselves in 2019 - low mortgage interest rates, tight market inventory, and rising purchase prices. While it is difficult to predict the future in any accurate way, 2020 by be deja vu all over again in the immortal words of the great Yankees catcher, Yogi Berra.
Most 15 and 30 year fixed mortgages are ranging between 3% - 4%, with favorable terms on some ARM and Jumbo loans as well. The current rate environment is prompting some people to even consider a refinance of their existing home mortgage. The historic mortgage rate averages are significantly higher than what we have seen in the last ten years. As a matter of fact, from the early 1970’s until the mid 2000’s, the average mortgage rate was more than double what we are paying today. With the Fed signaling a more dovish stance on rates, we anticipate seeing below average mortgage rates for the majority of 2020 as well. It is worth your time to speak to multiple lenders, including mortgage brokers who may be able to provide a more tailored experience.
In our opinion, the strong real estate market is more a product of low inventory than attractive mortgage rates. Both are charging up the market, however, the inventory challenges are creating more froth among buyers. The Dane County housing market, especially over the last 5-8 years, has required that buyers be ready to write an offer when the right house comes along. We strongly encourage potential buyers to meet with their mortgage lender prior to looking at homes and have settled on what is a want versus a need in a home. It is also our recommendation to work with a seasoned real estate agent. With a market that is routinely seeing multiple offers on a single property, you want an experienced agent who truly knows the market. The reality of the situation is that speed and efficiency is required.
We are happy to provide our thoughts and additional resources should you want to discuss your specific situation further. Feel free to reach out via email to start the conversation. Even though this market is more challenging for buyers in some aspects, it doesn’t need to deter anyone from purchasing a home. 2020 will be a great environment to secure favorable financing and land you the home of your dreams!Nate Condon