SUAMICO (NBC 26) — Over the past year, Deb Vorpahl and her husband have been looking for a home in Green Bay. But with high demand and rising prices, she says it’s been difficult to find something in her price range. Due to how quickly houses sell once they're on the market, she says she hasn't yet been able to put in a single offer.
"It's really been a challenge trying to find something because of the quick turnaround," Vorpahl said.
In addition, she says it's been difficult to find a house without bidding far over the asking price.
“We’re not going to over bid $30,000 or $20,000 over on a house just knowing that that’s not the smart move," Vorpahl said. "You have a set budget and you don't want to go over but you know that people are over bidding on homes."
Data from the Wisconsin Realtor's Association suggests that the median price of houses has increased over the past year. Even just in the past few months, the median price increased from $210,000 in January of this year to over $241,000 in April. Additionally, now high interest rates are creating yet another challenge for buyers.
Michael Dieterich, a loan officer for Land Home Financial Services, says interest rates were at a historic low last year and have steadily increased since then.
“Certainly we saw some historically low interest rates over these past two years, they’re kind of climbing back up to where they normally are,” Dieterich said.
Dieterich says while last year interest rates were anywhere in the high twos to mid-threes, this year they could be anywhere from three and a half to six and a half percent. That means in some cases, interest rates have doubled.
While he hasn't seen a significant decrease in applications so far, he believes if interest rates continue to rise, demand for houses may soon begin to decrease.
“Maybe closer to the higher sixes, maybe into the sevens or so, that might be a tipping point where we might see a decrease in applications,” Dieterich said.
However Jerrilynn Vandenberg, the owner of Fireside Realty, says the high interest rates do create some advantages for buyers. She says the high interest rates have already caused houses to stay on the market longer.
“It seems to be a little bit more crowded in the lower price range which is great news for buyers," Vandenberg said. "Now more time is being spent on the market with houses instead of being gone in two hours.”
With the high interest rates now slowing down demand, she says buyers will be able to buy a house for closer to the listing price.
“The lower end, first-time home buyers price range has now changed quite a bit because of the interest rates, but it’s better because it’s the listing price instead of ten to twenty percent over the asking price," Vandenberg said.