First Interstate loan officers offer guidance through the home-buying process.

In the early days of the pandemic, realtors, builders, lenders and others in the housing market braced themselves for activity to come to a screeching halt, mirroring many areas of the economy. Although an initial slowdown emerged, few foresaw the level of demand that would eventually send buyers into bidding wars and median prices edging higher. According to, Sheridan home values grew 5.3% from February 2020 to February 2021, and healthy conditions and demand are expected to persist.


Pandemic fuels housing demand in rural communities

The Sheridan housing market has experienced heightened demand both from current Wyoming residents as well as out-of-state buyers, particularly those in high-cost urban areas. As states and local municipalities imposed strict pandemic-related restrictions on movement and employers embraced remote work arrangements, individuals and families have been reevaluating their living situations.

For those with means, rural communities are becoming a draw. Markets in states like Wyoming and Montana have seen an influx of new residents seeking a relatively lower cost of living — especially in terms of housing costs. Access to open spaces, outdoor recreation, good schools and favorable tax structures are among other qualities that are drawing potential buyers. Current low mortgage interest rates are adding further incentive to make a change now.


Local buyers face increased competition

With a surge in local demand and a relatively low inventory of single-family homes in the Sheridan area, potential buyers are facing stiff competition. Because demand held steady through traditionally slower winter months, builders are scrambling to maintain a steady supply of new construction. Homes built speculatively are often sold before completion. Meanwhile, existing homes are receiving multiple offers, some in cash from outside buyers who have built up more equity.

While out-of-state buyers have helped fuel rising real estate values for existing homeowners, potential local buyers face the prospect of being priced out of their dream neighborhoods. Fortunately, area buyers have an advantage: a network of local experts to lean on for advice on properties as well as financing.


Financing that fits today’s competitive climate

For some, achieving a first-time home or a dream home might take a different path than originally envisioned. As existing homes and new construction get snapped up, local buyers might consider building — or possibly renovating — a home to their own specifications.

First Interstate Bank has a longstanding presence in Sheridan, giving the community bank a front-row seat to real estate market developments over the years. In the current environment, the bank can help local buyers explore ways to keep the purchasing process affordable even as values rise. The bank has furnished lending to buyers and builders of all sizes, and its professionals draw on their local construction expertise as loans move through underwriting and approval.

For buyers interested in building a home, First Interstate Bank offers various construction loans. A construction-only loan allows borrowers to gain short-term financing while their home is being built, and they have the flexibility to shop around for a separate, long-term mortgage. Such an option results in two closings, but provides the freedom to change lenders if desired.

With an all-in-one loan, buyers save time and money by paying just one set of closing costs and going through one qualification process. In this case, a construction loan is combined with a permanent loan, and the rollover is automatic. With First Interstate Bank, borrowers gain an additional benefit: a free interest rate float down option, which allows them to take advantage of lower rates if they improve before the conversion.

Finally, if buyers find a location that suits them, but a home that needs considerable work, First Interstate Bank has a renovation construction loan. The loan amount is based on the estimated value of the home after the upgrades, and buyers can typically secure a lower interest rate and longer repayment period than with a personal loan or home equity line of credit.

With any construction loan, borrowers must work with a qualified and reputable builder. First Interstate Bank conducts a thorough vetting process of new builders, protecting the interests of homeowners and the bank as a lender. Additionally, with its knowledge of the Sheridan community, the bank can offer recommendations and contacts throughout the real estate and building industry to help potential buyers find or create the home of their dreams with confidence.


Looking ahead

The Sheridan real estate market isn’t expected to slow down materially any time soon, but First Interstate Bank will be monitoring conditions and working with borrowers to adjust to changing conditions. With the right team in place, potential local homebuyers can improve their chances of finding a property that best suits their needs.

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