The Spring market is in full swing as sales of existing homes in the Chicago area were up 5.8% versus April 2023 as prices continue to climb. The median price of a home has climbed 9.4% on an annual basis. In their April analysis, The UIC Stuart Handler Department of Real Estate projects that sales will increase on a monthly basis but remain below 2023 levels due to a lack of inventory through the summer. Prices are expected to rise 6.6% in June on an annual basis. Industry experts project low inventory and rising prices for the foreseeable future until market fundamentals change.
Nationally, existing home sales fell 1.9% to a seasonally adjusted annual rate of 4.14 million in April from a revised 4.22 million in March, the National Association of Realtors reported.
The greatest obstacle to a change in the housing market at this time are mortgage interest rates. According to Freddie Mac, a 30-year fixed-rate mortgage with a 20% downpayment is down slightly since May 2 at 7.02%. That is down substantially from October 2023’s high of 7.79%. Unfortunately, it is not enough to motivate sellers to leave their 2-3% mortgages they have had since the pandemic. Over 40% of current mortgages originated in 2021 and 2022 when rates were low. A return to lower interest rates depends on the Federal Reserve reaching its goal of 2% inflation. Only then will the Fed lower rates. Inflation is down to 3.4% but is stubbornly hanging on. The Fed decided not to lower rates at their May 1 meeting as the job market continues to be hot and forecasts indicate it may be 2025 before there is any rate relief.
| CITY | DAYS ON MARKET | NEW ON MARKET | INVENTORY | SOLD | MEDIAN PRICE | ||||||
| Arlington Heights | 30 | 7.10% | 120 | 2.60% | 67 | 13.60% | 94 | 11.90% | $400,000 | 7.40% | |
| Barrington | 50 | -24.20% | 87 | -7.40% | 123 | -1.60% | 39 | -37.10% | $570,000 | -3.80% | |
| Crystal Lake | 18 | -43.8 | 101 | 14.80% | 86 | 19.40% | 60 | -10.40% | $381,500 | 19.20% | |
| McHenry | 30 | -45.50% | 76 | 40.70% | 45 | 7.10% | 59 | -19.20% | $277,000 | 10.40% | |
| Palatine | 36 | 5.90% | 115 | 27.80% | 79 | 1.30% | 84 | 12.00% | $320,000 | 12.30% | |
| Huntley | 32 | -30.40% | 74 | 45.10% | 62 | 34.8 | 63 | 96.90% | $343,000 | 6.20% | |
| Woodstock | 19 | -50% | 37 | 12.10% | 30 | -11.80% | 31 | 24.00% | $314,000 | 30.80% | |
As they say, all real estate is local. Zooming in on some local markets in the Starck Real Estate service area gives a more positive view of the real estate market closer to home. Of these 7 MLS areas, inventory has gone up in 5 of them and new homes are coming on the market in 6 out of 7. As you can also see, by the average days on the market, homes are selling faster and prices are increasing.
Waiting to buy or sell based on interest rates may be a false economy. Prices are rising due to the lack of inventory and will likely continue to rise for a while longer. By waiting, you may be missing out on the opportunity to achieve gains in home equity. Rates are highly likely to go down as inflation is falling, so you can always refinance when rates fall.