Mortgage rates slipped to 6.16% on a conventional 30 year fixed-rate mortgage, according to Freddie Mac. This is a dramatic change from 6.95% rates last January. Affordability just got a major boost what was a somewhat stagnant market. Subsequently, mortgage applications to buy a home jumped 16.9% in the second week of January (Mortgage Bankers Association). Lower rates seem to be in the cards, as the Federal Reserve cut interest rates by 25 basis points in December, bringing the total reduction to 75 basis points since September 2025.

Chicago area home sales were up 0.9% in November and only 0.25% for the year (Crain’s). The inventory of homes for sale was down almost 12%, reaching a historic low. Nationally, December home sales increased by 5.1%, while the inventory of homes decreased by 18.1%. Prices are still rising, albeit more slowly, with median home prices in the Chicago area up 5.4%. 

With mortgage rates falling, more sellers and buyers are expected to jump into the Spring market. The Institute for Housing Studies at DePaul University projects 2026 home sales in the Chicago metro area to increase 5.1% and home prices to increase 5% for the year. Nationally, Chief Economist for the National Association of Realtors, Lawrence Yun, optimistically forecasts a 2026 housing rebound with a 14% rise in existing home sales, moderate price growth by around 3-4%, and easing mortgage rates around 6%. Fannie Mae forecasts rates in 2026 to fall to 5.9% by year’s end, while the Mortgage Bankers Association is predicting rates to remain flat in the 6.5% range.

The US economy grew at an amazing 5.4% in the last quarter of 2025 due to consumer spending (up 3.5%), tech sector investments in AI, and a more balanced trade environment. This is the highest economic growth in 2 years. Annualized GDP growth was 2.3% (Trading Economics). Wages grew 4.1%, greater than the 2.7% rate of inflation. The S&P 500 stock index gained 16.39% in 2025, marking 3 consecutive years of double-digit performance. In all, these economic conditions indicate that we are poised for a robust Spring real estate market. 

Are you ready for the Spring Market? Contact us today for a free, no-obligation real estate review. Buying or selling, Starck Real Estate can help you achieve your real estate dreams!