Chicago’s late spring housing market may soon receive a shot in the arm as home-loan interest rates quietly slipped below 4% for the first time since January of 2018.
Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home loans averaged 3.99% for the week ending May 30th, down from 4.06% a week earlier. Last year at this time, lenders were quoting an average rate of 4.56% on 30-year fixed mortgages. Rates on 15-year fixed mortgages eased to an average of 3.46% from 3.51% a week earlier. A year ago at this time, the 15-year fixed mortgages averaged 4.06%.
On May 30th Chicago-area lenders were charging from 3.983% to 4.192% on 30-year fixed loans, reported rateSeeker.com.
“Lower mortgage rates should give a boost to the late spring housing market, which has been on the upswing nationwide with both existing and new home sales picking up recently,” said Sam Khater, Freddie Mac’s chief economist.
“While economic data points to continued strength, financial sentiment is weakening,” Khater noted. “The rate spread between 10-year and 3-month Treasury bills is narrowing on fears of the impact of the trade war with China grow.”
Although mortgage rates have been gradually falling this spring, Chicago’s home sales numbers have not yet rebounded, experts say.
The city of Chicago saw year-over-year home sales decrease 5.4% with 2,555 single-family homes and condominiums changing hands in April, compared with 2,700 units a year ago. While sales numbers are shrinking, prices are rising. The median price of a home in the city of Chicago in April rose 0.8 of 1% to $310,000, compared with April of 2018 when the median price was $307,500.
“Sales prices rose but were still relatively low in April, incentivizing buyers to act more quickly on homes they’re watching,” said Tommy Choi, president of the Chicago Association of Realtors and broker at Keller Williams Chicago–Lincoln Park.
“There continues to be more options as inventory is on the rise. As we get closer to summer, we’ll see a balanced market with benefits for buyers and sellers alike,” Choi predicted.
In the nine-county Chicago Metro Area, sales of homes and condominiums in April totaled 10,093 units, down 5.9% from April of 2018, when 10,725 units changed hands. The median price in April was $253,000 in the Chicago Metro Area, an increase of 1.2% from $250,000 in April of 2018.
“Prices continue to increase at a modest rate and month-to-month sales have continued to increase, however year-over-year sales are down reflecting the uncertainties in consumer behavior towards house purchases” noted Geoffrey J.D. Hewings, a University of Illinois economist.
“April’s home sales showed significant improvement over March as sellers began to stream back into the market for the warmer-weather selling season,” said Ed Neaves, president-elect of Illinois Realtors. “The fact that median prices continue to hold in positive territory shows there is a growing market equilibrium that will benefit both buyers and sellers.”
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.