Long-term mortgage rates are approaching 8 percent, which is as much as 3 percent higher than a year ago.
When it comes to land purchases, Hertz Farm Management out of Iowa says producers are not financing the majority of land purchases right now. Because of record farm income for several years, more farmers can buy land with cash, but lately, we have seen how interest rates have slowed residential home sales.
Will that happen with farmland?
“As is typical, the best farms have a large audience and can still fetch a big number. We’re finding the market is not as deep, especially for lesser-quality farms. I don’t describe the market as necessarily better or worse than a year ago, but it is different and can require a little more creativity and work on all farms,” said Doug Hensley.
Hensley says overall, sales volumes of farmland look to be normalizing, and prices are stable this fall.
