From Wall Street to China, the world’s economic news forecast was turbulent in early 2016, but the outlook for the mortgage market and home and condominium sales in Chicago appears to be bright, experts say.
Despite the Federal Reserve Board’s move to raise interest rates in December, mortgage rates bucked the trend and fell for the third straight week in late January.
Benchmark 30-year fixed mortgage rates declined to an average of 3.81 percent on January 21st from 3.92 percent a week earlier, reported Freddie Mac’s Primary Mortgage Market Survey. A year ago at this time, the popular 30-year fixed loan average was 3.63 percent.
“The 30-year mortgage rate drop reflected weak inflation and nonstop financial market turbulence that is driving investors to the safe haven of Treasuries,” noted Sean Becketti, chief economist of Freddie Mac.
If mortgage rates continue to be affordable, prospective home buyers who have good jobs, solid FICO credit scores of 720 or better, and down payment cash should have an opportunity in early 2016 to join in the housing rebound now underway in Chicagoland.
RE/MAX of Northern Illinois reported that both the number of existing home sales transactions and median prices continued to rise in 2015 in Cook, DuPage, Kane, Kendall, Lake, McHenry and Will counties. RE/MAX analyzed data collected by MRED, the regional multiple listing service.
Chicago accounted for 25 percent of all sales in the metro area in 2015, with 27,449 units changing hands, 8 percent more than in 2014, RE/MAX reported. The median sales price climbed 7 percent to $261,500.
Sales of attached homes—condominiums, townhouses and cooperatives—rose 4 percent in 2015 to 39,925 units in the Chicago metro area, while the median price rose 9 percent to $180,000.
The strength of the attached-home market was especially noticeable in the city of Chicago, where 16,941 units changed hands. That total represented 42 percent of all condo, townhome and co-op sales in the metro area, and an 8 percent increase over 2014, said Jim Merrion, regional director of RE/MAX. Median sales prices rose 5 percent for condos, townhomes and co-ops in Chicago.
A total of 69,751 detached single-family homes sold in the Chicago metro area in 2015, an 8 percent increase in sales activity over 2014. The median sales price for detached homes gained 5 percent to $225,000. The average market time was 101 days, up 3 days from the prior year.
Distressed properties continued to dwindle as a percentage of homes sold in the Chicago area in 2015, but still accounted for 21 percent of all sales, down from 28 percent in 2014, RE/MAX reported. The distressed homes category includes properties being sold through a short sale or foreclosure.
“The Chicago market continues to post strong price gains, reflecting consumer interest in being in a vibrant city and a continuing shortage of available homes from which to choose,” said Dan Wagner, president of the Chicago Association of Realtors. “All indicators are that the momentum we saw in 2015 will bridge over into the new year.”
“The housing market continued to make positive strides in 2015,” said Mike Drews, president of the Illinois Association of Realtors. “Buyer demand remains strong even amid tighter winter inventory and higher home prices bode well for homeowners thinking of selling.”
For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.