What’s Trending – April 2022

The inventory of homes for sale in the Chicagoland area fell 33.6% while prices rose an average 10.2% in February. Mortgage rates are under pressure from both sides as inflation pushes them up and the uncertainty around the war in Ukraine pushes them down. As it stands, the average for a 30-year conventional mortgage is at 3.85%. Continued strong demand for housing shows no sign of abating with over 70% of offers facing bidding wars.

Buyers feel the urgency to get a home now before rates increase. Some 57% of homes have an accepted offer within the first two weeks of being listed. The lack of inventory caused the number of homes sales to fall -2.7% year on year.

Home sales depend on a good economy. In spite of all the concerning headlines, the US economy is doing remarkably well. In February, consumer spending was up 7.2% over last year. Job creation is at record levels as Morgan Stanley estimated that February payrolls grew by 730,000 and the unemployment rate fell to 3.7%. Corporate profits rose 22% in the fourth quarter of 2021. Restaurant seating is up 6% over pre-pandemic levels and hotel occupancy rates are at 59% versus 45% one year ago. The TSA reports airport check-ins hit 2.15 million in February versus 1.19 million one year ago.

Economist Mark Zandi of Moody’s Analytics states that the US is well-positioned to weather the shocks from the war in Ukraine. The increase in oil prices and other commodities, while painful to consumers, will lower his original estimate of GDP growth only slightly from 3.7% to 3.5% for 2022. Home sales are expected to remain strong.

If you are thinking of selling your home there has never been a better time to cash in on your equity and trade up.