Mortgage rates likely to stay high in the New Year

WAUSAU, Wis. (WSAW) – If you plan to buy a home in 2025, start saving now. Mortgage rates are likely to stay high around the seven percent mark.

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The Wisconsin Realtors Association’s stats on Marathon County show 1,314 homes have been sold so far this year. It’s right around last year’s sales numbers, but generally lower than it has been in 10 years. With a median price of $255,000 so far, it far exceeds last year’s median by $20,000.

These numbers ring true statewide with 62,255 homes sold so far for 2024. It’s the lowest since 2012 along with a median price of $310,000, the highest it has been in provided data.

Part of the high prices comes from a supply issue.

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“People are still buying, and the homes are going fast still, but there just isn’t a lot of inventory out there,” Andrea Sasman, a Retail Mortgage Banker with Nicolet National Bank, said.

People who bought homes around 2020 where mortgage rates were closer to two to three percent might find themselves wanting to stay put for longer, as the current rates are forecasted to stay up.

“I think next year is going to be the same as what we saw this year with rates like I said rates are kind of where they started last year is where they’re ending this year,” Sasman said.

She said receiving a pre-approval will be helpful for anyone who is looking to buy in the New Year.

“Pre-approval is key to figuring out your budget, and being comfortable with the payment,” Sasman explained. “I know realtors want their buyers to come with a pre-approval letter, too.”

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Even if you are unable to get pre-approved, perhaps because home prices are outpacing wage growth, Sasman still recommended speaking with a lender to better understand where your budget lies.

“When it comes to getting pre-approved, you aren’t able, some people aren’t able to get pre-approved for as much as they would like to get pre-approved for because the rates are higher which therefore causes your payment, your monthly payment to be higher,” Sasman said.

Sasman recommends saving up money, improving credit scores, and working with retail mortgage bankers to learn what options you have. She added you can always refinance your home when rates come down.

“I always tell people if you can lower your rate by a point, it’s worth it to the cost to do the refinance,” Sasman said.

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