Interest Rates Will Drop, But It Might Not Solve Wyoming’s Housing Puzzle

Skyrocketing property taxes, affordable housing shortages, homes gobbled up as investment properties for Airbnb rentals — Wyomingites hoping to buy a new home in 2024 face no shortage of obstacles.

But at least one hurdle appears like it’s set to lower, with a top Federal Reserve official saying this week it appears that the war against inflation has been won. Even before that statement, many analysts have been saying that the Federal Reserve is on track to begin cutting interest rates as soon as March. That just seems to solidify the position that interest rates are headed down again.

While no one is sure how low they’ll go, anything in the 5% range is bound to dramatically change real estate markets across the state by lowering the income threshold it takes for would-be homebuyers to enter the market. But it’s not necessarily going to be a panacea for buyers in the Cowboy State.

That’s because Wyoming homebuyers are by and large looking at real estate markets that are shorter than usual, and whose prices haven’t dipped all that much during the high-interest rate period.

Sellers On The Sidelines

Part of the constrained supply is that would-be sellers who can’t trade up due to high interest rates have been sitting on the sidelines waiting for a better day.

Those sellers will likely list once interest rates are favorable again, helping a little with supply. But many areas have other factors that have been keeping their prices high and supply constrained.

Markets like Cheyenne and Jackson, for example, are seeing out-of-state demand that’s plumping prices and thinning housing stock.

In Cheyenne, Coldwell Banker Real Estate Agent Mariah Jeffrey told Cowboy State Daily she’s seeing lots of out-of-state buyers for a range of reasons, some of them political.

“I saw people from Colorado who feel it has gotten a little too liberal for their tastes and they want to come to Wyoming,” Jeffrey said. “But I also saw, probably as much or more, people wanting to come for tax reasons.”

A significant number of people are also coming to Cheyenne and other border communities because their jobs allow them to work remotely, if not every day, at least three days of the week.

“Some of them have to go back to the office,” she said. “But maybe they only have to go back two days a week now. It’s much easier for them to stomach a commute from say, Cheyenne to Fort Collins, two days a week than it would have been if they had to go five days a week.”

Nearby Laramie, meanwhile, doesn’t get much traffic from Colorado buyers, but it has many parents who are interested in buying a house for their child to live in while they attend University of Wyoming. Jeffrey said that has helped to keep market prices up and supply low in that market.

COVID Fast No More

Real estate sales associate at Our323 Kathy Scigliano has seen similar trends as Jeffrey in Cheyenne.

While in 2020 she couldn’t even show houses because offers came in so fast, the slowing of…