HOME RESALES TUMBLE IN CHICAGO, ACROSS IL, U.S. - Will Lower Mortgage Interest Rates Spur Housing Rebound?
DESPITE MODERATION IN MORTGAGE RATES, CHICAGO HOME SALES OFF 41.3 PERCENT VERSUS NOVEMBER, 2007!
The drumbeat of decreasing home sales, along with declining median home prices, continued both locally and nationally during November, according to figures released by both the National and Illinois Associations of Realtors Tuesday.
Within the City of Chicago, units of single family and condos sold dropped 41.3% in November as compared to 2007 numbers, while the median home and condo price fell 23.3% during the same period. The current Chicago Median Price is $222,500, down from $290,000 one year ago.
Statewide, across Illinois, units sold 33.9% versus one year ago, and the median price fell 13.2%.
The IL and local figures come on the heals of a discouraging report by the National Association of Realtors indicating a units-sold drop nationally of 8.6% in November alone, versus October, 2008. The national median home price dropped 13.2% year over year between November, 2007 and this November, to $181,300. That's the largest annual decrease in 40 years.
NAR figures indicate 4.2 Million unsold homes were on the market last month, representing a theoretical 11.2 month inventory for sale. This was up from the 10.3 month estimated national inventory in October.
In a bit of encouraging news, mortgage interest rates are down, on average, from 6.25% for a 30-Year Fixed Rate Loan in November, 2007, to a 6.13% average today. Last week, the Federal Reserve Board lowered its benchmark Fed Funds Rate to a target between 0 and 0.25%, immediately, yet temporarily, dropping average interest rates to a near-record 5.19% level for the week ending December 18th, according to data provided by U.S. Mortgage Investor and Guarantor Freddie Mac, the Federal Home Loan Mortgage Corporation.
Falling interest rates sparked a surge to refinance by existing homeowners. Continued lower rates could spur new purchases next year, many experts say, especially if mortgage rates fall near the 4.5% range targeted by the Fed. Many also agree, however, that unsold inventory would have to be reduced, and the increase in home foreclosures abated, for a true housing rebound to begin.
For more info, read Alan Zibel's story in today's Chicago Tribune, as well as summary statistical information from the Illinois Association of Realtors, from their Press Release today.
DEAN MOSS & DEAN'S TEAM CHICAGO
