As mortgage interest rates continue to fall, now’s the perfect time for prospective home buyers to get off the fence and dive into the spring house-hunting market, experts say.
Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed-rate mortgages plummeted to an averaged 4.06% for the week ending March 28th, down from 4.28% a week earlier.
The 22 basis-point decline was the biggest one-week drop in a decade, Freddie Mac noted. On January 3rd, the average 30-year loan rate was 4.51%. Last year at this time, the 30-year fixed loans averaged 4.40%.
Chicago-area lenders were charging a range of 4.234% to 4.318% on 30-year fixed-rate mortgages on March 29th, reported rateSeeker.com.
Fifteen-year fixed mortgages declined 14 basis points to an averaged 3.57% on March 28th, down from 3.71% a week earlier. On January 3rd, the average 15-year loan rate was 3.99%. A year ago, 15-year loans averaged 3.90%.
“The Federal Reserve’s concern about the prospects for slowing economic growth caused investor jitters to drive down mortgage rates by the largest amount in more than 10 years,” said Sam Khater, Freddie Mac’s chief economist.
“Mortgage rates have dipped quite dramatically since the start of the year and house prices continue to moderate, which should help on the home buyer affordability front,” Khater said.
“The combination of improving affordability and more inventory than the last few spring selling seasons should lead to improved home sales demand,” he said.
Realtors agreed the existing housing market in Chicago is being stimulated by the long-term trend of lower mortgage rates.
“As we enter the spring market, buyers on the hunt are eager to take advantage of lower interest rates and are serious once they find their desired home,” observed Tommy Choi, president of the Chicago Association of Realtors and broker at Keller Williams Chicago–Lincoln Park.
Chicago home prices rise
Illinois Realtors reported that the median price of a home in the city of Chicago in February was $273,900, inching up 0.7% of one percentage point from $272,000 in February of 2018.
However, the city of Chicago saw year-over-year existing home sales decrease 7.4% with 1,422 units changing hands in February, compared with 1,535 units a year ago, reported Illinois Realtors.
“February’s data is in line with what we have come to expect as our market shifts,” said Choi. “Even though closed sales are down, median sales prices ticked up and both inventory and days on market declined.”
In the nine-county Chicago Metro Area, single-family home and condominiums sales in February totaled 5,607 units, down 4% from February 2018 sales of 5,839 homes. The median price in February was $230,000 in the Chicago Metro Area, an increase of 1.1% from $227,500 in February of 2018.
Sales and price information was generated by Multiple Listing Service closed sales reported by 27 participating Illinois Realtor local boards and associations including Midwest Real Estate Data.
Statewide, 8,174 homes and condos were sold in February, down 1.8% down from 8,327 units in February of 2018. The statewide median price in February was $187,000, up 1.1% from February of 2018, when the median price was $185,000. (The median is a typical market price where half the homes sold for more and half sold for less.)
“Home sales were lower in February, but median prices are still recording steady growth in the state,” said Ed Neaves, Illinois Realtors president-elect.
“What’s notable is that the time it takes to sell a home is down three days, a market indicator which shows consumers want to buy, but may struggle to find enough options from which to choose,” Neaves said. The time it took to sell a home in February averaged 68 days, down from 71 days a year ago.
Available home inventory statewide totaled 47,711 units for sale, a 3% decline from 49,193 units in February of 2018.
“Housing prices continue their slow but steady increase,” said Geoffrey J.D. Hewings, a University of Illinois economist. “However, year-over-year sales exhibit negative trends for the next three months although month-to-month changes are forecast to be very positive.”
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.