29-May-17 – Last Thursday, the average rate on benchmark 30-year fixed home loans dipped to 3.95 percent from 4.02 percent a week earlier, reported Freddie Mac’s Primary Mortgage Market Survey. The current average rate is the lowest mark of 2017. In mid-March the rate hit a high of 4.30 percent. A year ago, at this time, 30-year fixed loans averaged 3.64 percent.

“The 30-year mortgage rate fell seven basis points last week in a delayed reaction to the prior week’s sharp drop in Treasury yields,” explained Sean Becketti (left), Freddie Mac’s chief economist.

The current average 30-year mortgage rate is the lowest since April 20, when it dipped to 3.94 percent. Prior to that, a low of 3.94 percent was reached on November 17, 2016.

Meanwhile, on May 25, average 15-year fixed loans fell to 3.19 percent, down from 3.27 percent a week earlier. A year ago, 15-year fixed rate loans averaged 2.89 percent.

If rates hold at these levels, experts say there likely will be a revival of home sales and refinances over the next few weeks as “fence sitters” try to beat further expected rate increases in mid-June when the Federal Reserve Board meets.

A Bankrate.com survey showed Chicago-area lenders were charging a range of 3.756 to 3.925 percent on benchmark 30-year fixed loans on May 25.

Mortgage rates hit a historical rock bottom on November 21, 2012, when the benchmark 30-year fixed mortgage average plummeted to 3.31 percent, while 15-year fixed loans edged downward to 2.63 percent, Freddie Mac reported.

Despite lower mortgage rates, home sales slowed in April because of seasonally low inventory levels, according to Illinois REALTORS. However, prices continued to rise because of competition amid reduced inventory.

Chicago saw a 4.4 percent year-over-year home sales decline in April with 2,586 sales, down from 2,706 in April 2016. The median price of a home in Chicago in April was $297,150, up 3.9 percent compared with $286,000 in April a year ago.

“With the spring market underway, buyer demand has not abated in the least,” noted Matt Silver (right), president of Chicago Association of Realtors. “Rather, increased competition for homes that are priced well and move-in ready will continue to drive prices upward. Both motivated sellers and buyers should be prepared for these conditions to continue in the coming months.”

In the nine-county Chicago area, single-family home and condominium sales totaled 10,157 units in April, down 2.3 percent from 10,397 in April 2016. The median price in April was $242,000 in the Chicago area, an increase of 5.2 percent from $230,000 in April 2016, according to Midwest Real Estate Data, LLC.

“Sellers flooded the market in March and as a result, inventories were struggling to keep pace with demand in April,” said Illinois REALTORS President Doug Carpenter (left). “It’s clear from the relatively short average time to sell that buyers really do want to find a home. The problem is they have to work much harder to find one that meets their criteria due to a shortage of options.”

The time it took to sell a home in April averaged 61 days statewide, down from 68 days a year ago. Available housing inventory in Illinois totaled 54,666 homes for sale, a 15.3 percent decline from April 2016 when there were 64,554 homes on the market.

“While sales will continue the usual early summer upward growth, there are some sharp differences in the forecasts for median prices,” said Geoffrey J.D. Hewings, a University of Illinois economist.

“The forecasts for median price indicate continued positive changes, but the real Housing Price Index, which compares specific housing characteristics, suggests declines and may also be reflecting the employment losses in the state over the past two months,” said Carpenter (right).