What Rising Mortgage Rates Mean for Hudson WI Real Estate in 2025

by Mark Johnson

As we move through 2025, mortgage rates are once again grabbing headlines—and not for the reasons homebuyers hoped. This week marks the fifth consecutive increase, with the average 30-year fixed mortgage jumping to 7.04%, according to Freddie Mac.

That’s the first time rates have topped 7% since May of last year—and for many buyers and sellers across Hudson, Western Wisconsin, and the Twin Cities, this change is making waves.

Let’s unpack what this means for the local housing market and how you can move forward with confidence.

What Higher Mortgage Rates Mean for Buyers

The short version? Higher rates = higher monthly payments.

Let’s say you’re eyeing a $400,000 home in Hudson with a 20% down payment. At 7.04%, your estimated monthly mortgage payment would be around $2,138. If you put down just 10%, that jumps to $2,405—a pretty big leap from what buyers were used to just a couple of years ago.

How This Impacts Buyers:

Tighter budgets – Buyers may need to look at lower-priced homes or explore different neighborhoods.
Reduced purchasing power – Higher rates can limit how much home you can afford.
Increased financial caution – More buyers are pausing their searches or taking extra time to weigh decisions.

Not All Bad News: The Case for Shopping Around

Here’s a silver lining: Not all lenders offer the same rates.

Even though 7.04% is the national average, actual mortgage rates vary depending on your lender, credit score, and loan program.

Tips for Buyers:

Get multiple quotes before choosing a lender.
Work with a local mortgage broker who understands the Western WI and Twin Cities markets.
Negotiate for a rate buydown—some sellers are open to covering part of your closing costs or helping reduce your interest rate.

Small rate differences (even 0.25%) can save you thousands over the life of your loan, so it’s worth comparing.

Selling in a High-Rate Market: What You Should Know

If you’re a homeowner thinking about selling in Hudson or Western Wisconsin, higher mortgage rates bring both challenges and opportunities.

What to Expect:

A smaller pool of buyers – Higher borrowing costs have pushed some buyers out of the market.
Longer days on market – Homes may take longer to sell than they did a year ago.
More serious buyers – Those still shopping are motivated and often pre-approved.

Tips for Sellers:

Price strategically based on current local comps—not last year’s numbers.
Stage and present your home well to make a strong first impression.
Be flexible—buyers may request rate buydowns or closing cost assistance.

Homes in good condition and priced right are still moving—especially in desirable communities like Hudson, River Falls, and Somerset.

Spring 2025 Outlook: Could Rates Drop?

There’s hope that we could see some relief by spring.

According to Lawrence Yun, Chief Economist at the National Association of REALTORS®, mortgage rates may dip slightly in the coming months—potentially landing around 6.5%.

If that happens, we could see:

Increased buyer activity
More homes hitting the market
A stronger spring and summer season

For Hudson and the surrounding area, that’s great news. Our market tends to heat up in the spring as more families look to move before the next school year, and a small drop in rates could make a big difference.

What Buyers and Sellers Should Do Right Now

Whether you're buying or selling, it’s smart to stay proactive. Here's how to prepare:

Buyers:

Get pre-approved now to lock in your budget.
Shop lenders to find the best rate and loan terms.
Explore all options—consider new builds, price drops, or smaller homes that fit today’s rates.

Sellers:

Start prepping your home—clean, declutter, and handle repairs.
Work with a local real estate agent to price your home competitively.
Stay flexible—being open to negotiation can help your home stand out.

Final Thoughts: It’s Still a Market with Opportunity

Yes, mortgage rates above 7% are a big shift—but they don’t have to stop your plans. The Hudson WI real estate market is still moving, and whether you're looking to buy your first home, move up, or downsize, there are still smart ways to approach this changing landscape.

Just remember: Real estate is local. National trends are important, but what really matters is what’s happening right here in our community.

Ready to make a move in Hudson or the surrounding area?
Let’s talk! Contact The Johnson Group at Coldwell Banker Realty today to start your journey.

📞 Call us today at 651-333-7656
🌐 Or visit www.johnsonhomegroup.com
📍 Serving Hudson, WI and the greater Twin Cities metro area

Click her to read the full article https: www.nar.realtor/magazine/real-estate-news/mortgage-rates-surge-above-7-defying-expectations