GRAND CHUTE, WI (WTAQ-WLUK) – Sales of existing homes have dropped for eight straight months nationwide. In the Appleton area, it’s no different.
The national fixed mortgage rate has increased nearly four percentage points over the last year.
“That’s a big difference,” Prospera Credit Union Mortgage Lender Cheryl Ellis said. “Here in the Valley area, they’ve been around two percent, two and a half percent, three percent — ridiculously low rates for years. So, this is an interesting market that we’re in right now.”
Ellis tells FOX 11 the rates have been steadily climbing for months.
“It’s about seven percent right now on the 30 year fixed, and honestly if we could get it around four, four and a half, five percent, the market would be booming like it was a few months back.”
Because of the rates, housing in Appleton has become unaffordable for some. That’s why the Appleton Housing Authority reworked a first-year home buyer program.
“The housing market was very volatile,” Appleton Housing Authority Executive Director Deb Dillenberg said. “We had to make some decisions to go from a 30 year fixed interest rate, that we required for the homebuyers, to something that, if there’s an arm out there, we will go ahead and accept that.”
Dillenberg said the program has helped over 550 families. Now, even more help is needed.
“Because of the interest rates, because of the starting cost of housing, we have seen that the lower percentage of low income families are totally wiped out of the market.”
In her 30 years in the business, Ellis has only seen a similar situation once before. She says the recent changes in fixed mortgage rates mirrors what was happening in 2006 and 2007.
“People were buying their first home, their vacation home, their townhome — things like that. And then the recession hit. So, a lot of that backfired basically. So, we’re close to that. I don’t think it’s going to be that extreme.”
The national average fixed mortgage rate reached its new high just last week.
In August, Outagamie County spent $3.5 million in federal ARPA funds on affordable housing.
