January 29, 2024
For the first time since 2001, interest rates are rising faster than farmland values, creating a potential obstacle to land purchasers, said the Kansas City Federal Reserve Bank. With interest costs now above average land value appreciation, farm operating profits will determine the magnitude of returns for financed land.
Although growth in farmland values held firm in 2023, higher interest rates and a moderation in agricultural commodity prices have cut potential returns and could dampen demand for farmland — and thus farmland values — going forward.
Meanwhile, ag bankers said in a Federal Reserve survey that the volume of new non-real estate loans was 15% lower during the final quarter of 2023 than during the same period in 2022. While the number of new loans was slightly higher than in fall 2022, the amount borrowed, when adjusted for inflation, was the lowest since 2017.
Elevated production costs, higher interest expenses, and lower commodity prices have increased financing needs of many producers; however, strong liquidity built up in recent years likely supplemented borrowing needs of some operations throughout the year.
As Mark Twain coined, “Buy land, they’re not making it anymore”. Contact us today to assist with your land purchases and sales.
October 31, 2024
Kansas Real Estate Market Opportunities
As we move into the final months of the year, the real estate market continues to offer opportunities for buyers and sellers, even in a higher interest rate environment. While interest rates have risen from the record lows of the past few years, they remain…
Read more