27-Aug-15 – When the Dow Jones Industrial Average plummeting nearly 900 points in two trading sessions to close at 16,459 on August 21, it sent a chill through investors’ wallets. But it also likely put a damper on the Federal Reserve Board’s expected plan for a rate hike in September.

Before the stock market plunge, benchmark 30-year fixed-rate mortgages averaged 3.93 percent on August 20, down slightly from 3.94 percent a week earlier, reported Freddie Mac’s Primary Mortgage Market Survey.

The average benchmark rate has hovered below four percent for five consecutive weeks. A year ago at this time, the 30-year fixed loans averaged 4.10 percent.

The nation’s central bank said conditions for a rate hike have yet to be achieved. It would be the first Fed rate hike in nearly a decade. Along with the rocky stock market, the Fed also is concerned about fallout from China’s lagging economy and persistent low inflation.

“Overall inflation grew an under-whelming 0.2 percent year-over-year in July, but core inflation remains steady at 1.8 percent, keeping chances alive for a potential [Fed] rate hike in September,” said Sean Becketti (left), chief economist of Freddie Mac. “Housing markets have responded positively to low mortgage rates.”

Existing single-family home and condo sales in Chicago rose to 2,989 units in July 2015, up 9.7 percent from the same month a year ago, reported Illinois Association of Realtors (IAR). The median price of a home in Chicago was $285,000, up 5.2 percent over July 2014.

“The busy summer home buying season is closing out on a high note,” said Hugh Rider (right), president of Chicago Association of Realtors and co-president of Realty & Mortgage Co. “We’ve seen solid sales gains throughout the year, and there is every expectation that we’ll see the market momentum continue into the fall as buyers select from reduced inventories.”

In the nine-county Chicago area, home and condo sales in July totaled 12,384 units, an increase of 9.6 percent from July 2014. The median price in July in the Chicago area was $226,700, up four percent from July 2014.

“The strong year-over-year gains we saw in July suggest there is plenty of steam left in this market,” said Jim Kinney (left), president of IAR and vice president for luxury sales for Baird & Warner in Chicago. “Buyers are finding they have to work quickly once they find the home they want, since inventories are very low.”

IAR reported that statewide home and condo sales in July totaled 16,901 units, up eight percent from a year ago. In July 2015, it took an average of 58 days to sell a home in Illinois, down from 65 days a year ago.

Available housing inventory remained tight with 72,371 homes listed for sale, a 7.7 percent decline from July 2014.

“Sales growth, on a yearly basis, returned to more modest rates in July after the rapid monthly change the previous month,” said economist Geoffrey J.D. Hewings (right) of University of Illinois. “Home prices in Illinois are forecast to grow more strongly than in Chicago.”

Foreclosures continue to play a smaller role in the housing market and sales prices for foreclosed properties continue to increase, Hewings said.