27-Aug-17 – Benchmark 30-year fixed home loan rates averaged 3.86 percent nationwide on August 24, the lowest mark since November 10, 2016, reported Freddie Mac’s Primary Mortgage Market Survey.

Chicago-area borrowers who shop around can lock in a 30-year fixed mortgage for around 3.7 percent, lenders say.

“Thirty-year fixed mortgage rates declined for the fourth consecutive week, dropping three basis points to a new year-to-date low of 3.86 percent,” said Sean Becketti (left), chief economist for Freddie Mac. A week earlier, the benchmark rate averaged 3.89 percent. A year ago at this time, 30-year loans averaged 3.43 percent.

“The 10-year Treasury yield fell six basis points this week amid concerns over lagging inflation,” Becketti said.

Freddie Mac reported that 15-year fixed loans averaged 3.16 percent, unchanged from a week earlier. A year ago at this time, the 15-year fixed loans averaged 2.74 percent.

Although cheap mortgage money appears to be available in Chicago, a lack of for-sale, existing-home inventory continues to slow the market and drive prices higher, Illinois REALTORS report.

“For more than two years, Illinois’ housing market has seen decreases in the number of homes for sale on an annual basis,” said Doug Carpenter (right), president of Illinois REALTORS. “This chronic lack of inventory is making the market challenging for all buyers, but particularly for those looking to purchase a more modestly priced home.”

Homes selling faster but inventory is lower

The time it took to sell a home in Illinois in July averaged 47 days, down from 53 days a year ago. Statewide, available housing inventory totaled 60,541 housing units for sale, a 12.6 percent decline from July 2016 when there were 69,262 units on the market, according to data from Illinois REALTORS and Midwest Real Estate Data LLC.

Chicago saw a 5.7 percent year-over-year home sales decline in July with 2,621 existing home sales, down from 2,780 units in July 2016. The median price of a home in Chicago in July 2017 was $301,000, up 3.8 percent compared to $290,000 in July 2016. The median is a typical market price where half the homes sold for more and half sold for less.

“In Chicago, inventory isn’t as restricted in certain price ranges,” noted Matt Silver (left), president of Chicago Association of Realtors. “There continues to be plenty of opportunity at different price points, particularly for move-up buyers.”

In the nine-county Chicago area, single-family home and condominium sales in July totaled 11,322 units sold, down 4.9 percent from 11,905 units sold in July 2016. The median price in July was $248,000 in the Chicago area, an increase of 4.4 percent from $237,500 in July 2016.

Statewide sales of single-family homes and condos in July totaled 15,677 units sold, down 4.3 percent from 16,375 units in July 2016. The statewide median price in July was $210,000, up 5.8 percent from July 2016, when the median price was $198,500.

“The concerns this month center on the continuing low inventory rates and the potential dampening of demand caused by real income growth failing to keep pace with rising house prices,” said Geoffrey J.D. Hewings (right), a University of Illinois economist. “Affordability is once again becoming a concern, especially for those seeking to enter the housing market.”