Strong home-buying demand and an unexpected dip in mortgage rates generated hefty existing housing sales in March, Realtors report.
Existing home sales in the seven-county Chicago metropolitan area jumped 14.8 percent to 9,556 units in March compared with March of 2016. The median sales price rose to $234,000, a gain of 10.4 percent, according to the RE/MAX Northern Illinois network.
A total of 21,584 homes were sold in the first quarter of 2017, a 5.6 percent gain over the same period last year. Sales data used by RE/MAX is collected by Midwest Real Estate Data, the regional multiple listing service.
“We expected a fairly robust early spring market, but the March results definitely surprised on the upside,” said Jack Kreider, executive vice president and regional director of RE/MAX Northern Illinois.
“Mild winter weather certainly helped bring out buyers, as did an improving job market and the expected outlook for gradually rising interest rates,” Kreider said.
An actual four week dip in home-loan rates also likely played a role in the spike in home sales, experts say.
Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home loans hit 4.08 percent on April 13th —a new low for 2017. Rates averaged 4.10 percent a week earlier. A year ago at this time, 30-year loans averaged 3.58 percent.
“Following a weak March jobs report, the 10-year Treasury yield dropped about 5 basis points,” noted Sean Becketti, chief economist, Freddie Mac. “The 30-year mortgage rate fell 2 basis points to 4.08 percent. Not only did the average 30-year fixed-rate mortgage decline for the fourth consecutive week in our survey, it also fell to a new 2017 low.”
Earlier, Metrostudy, a real estate research firm, reported that 6,800 newly constructed homes were sold in the Chicago area in 2016. That’s a 13 percent increase over 2015, and a huge improvement over the 2007 through 2014 Great Recession period when new home construction virtually stopped. Some 36,000 new homes were built in 2006.
“March existing home sales were the highest they’ve been since 2006, and the same is true for total first-quarter sales, Kreider said. “I’m optimistic that the market can maintain this momentum at least through the second quarter.”
Homes sold during March spent an average of 100 days on the market before going under contract, 10 days less than the prior March. For the entire quarter, average market time was 102 days, eight days faster than the same quarter last year.
March home sales activity rose in six of the seven metro counties, led by gains of 33.4 percent in McHenry, 25 percent in Will and 24.4 percent in Kane. Other gains were 17.9 percent in DuPage, 11.8 percent in Cook and 9.5 percent in Lake. Sales in Chicago were up 17.7 percent.
Sales of detached single-family homes in the metro Chicago area rose 15.8 percent in March to 5,994 units and 4.6 percent during the first quarter to 13,604 units.
The metro median sales price for March was $250,000, an 11.1 percent increase over March of 2016. Median prices rose 9.3 percent in the first quarter.
Single-family home sales activity and the median price rose in all seven counties in March, but it was Chicago that delivered especially strong results. Sales there rose 16.3 percent to 957 units, and the median price was up 14.6 percent to $235,000.
The market for condos, townhomes and co-ops was slightly more subdued in March than its detached-home counterpart due in part to an extremely low inventory of units for sale. Still, sales activity rose a robust 13.2 percent to 3,562 units, and the median sales price gained 5.3 percent to $195,000.
In Cook County, which accounted for 69 percent of attached sales, activity rose 11.2 percent, including an 18.5 percent increase in Chicago.
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.