Now Is A Great Time To Buy A Home If You Can Qualify For A Loan
If you can qualify for a mortgage now is a great time to buy a home or a condominium, experts say.
Benchmark 30-year fixed mortgage rates fell to 3.63 percent—near a 65-year low—last week amid declining bond yields and sinking oil prices, analysts said.
The average rate on a 30-year loan fell to 3.63 percent on January 22nd, the lowest level since the week ending May 23, 2013 when it averaged 3.59 percent, reported Freddie Mac’s Primary Mortgage Market Survey.
On November 21, 2012, the benchmark rate hit a record low of 3.31 percent, reported Freddie Mac. A year ago at this time, the 30-year fixed loan averaged 4.39 percent.
Meanwhile, 15-year fixed mortgage rates averaged 2.93 percent on January 22nd, down from 2.98 percent a week earlier. A year ago, the 15-year loan averaged 3.44 percent.
“Mortgage rates continued to fall, while housing starts picked up, coming in at a seasonally adjusted 1.089 million-unit pace in December and beating market expectations,” noted Frank Nothaft, vice president and chief economist for Freddie Mac.
Mark Zandi, chief economist for Moody’s Analytics, noted that experts were surprised how gracefully the financial markets and the economy digested the Federal Reserve Board’s recent quantitative easing of interest rates.
“Long-term rates, including mortgage rates, ended the year much lower than they began the year,” Zandi said.
However, Zandi said the Fed likely will begin raising short-term rates by mid-2015 and long-term mortgage rates are expected to follow.
Laurence Yun, chief economist of the National Association of Realtors, expects 30-year mortgage rates to average around 4.9 percent in the second half of 2015.
“This year marks what appears to be a turning point for the Illinois housing market,” said Jim Kinney, president of the Illinois Association of Realtors (IAR) and vice president for luxury home sales at Baird & Warner in Chicago. “We saw strong and sustained median price gains and sales volumes remained healthy throughout the year. The showing we had in 2014 sets the housing market up nicely for a strong start to 2015.”
In December of 2014, home and condominium sales in the nine-county Chicago area totaled 7,971 units, down 3.7 percent from sales of 8,278 homes in December of 2013. Year-end 2014 home sales totaled 104,379 units, down 6.5 percent from 111,672 homes sold in the nine-county region in 2013.
The median price in December of 2014 was $184,000 in the Chicago area, up 4.2 percent from $176,500 in December of 2013. The year-end 2014 median price rose to $194,000, up 9.3 percent from $177,500 in 2013.
In Chicago, home and condo sales declined 6.8 percent in December of 2014 to 1,992 units, compared with 2,137 units sold in December of 2013. Year-end 2014 home sales totaled 25,414 units in Chicago, down 6.7 percent from 27,242 units in 2013.
The median price of a home in Chicago in December of 2014 was $229,250, up 9.2 percent compared with $210,000 in December of 2013. Year-end 2014 median price reached $245,000, up 11.4 percent from $220,000 in 2013.
“Significant employment gains, declines in the unemployment rate and gas prices have all contributed to enhancing consumer expectations that hopefully will turn into more housing sales in 2015,” said Geoffrey J.D. Hewings, a University of Illinois economist.
Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. For more information, visit www.escapingcondojail.com.