Chicago Buyers Stare Down High Interest Rates and Prices
Recent home data through September 2024 reveals that long-sought after home affordability for Chicago buyers remains elusive.
Home prices are rising faster in the Chicago area than in most of the U.S. and have been for most of 2024. Plus, mortgage rates didn’t make the steep drop buyers anticipated when the Federal Reserve in September made its first rate cut in four years.
Chicago home prices are the fastest growing in the nation.
Home prices in the Chicago metro area grew in August by more than those in 17 of the 20 major U.S. cities tracked by the S&P CoreLogic Case-Shiller Indices.
Chicago-area home prices were up 7.23% in August, according to the index, behind only New York (8.1%) and Las Vegas (7.28%). Nationwide, home prices were up 4.25% in September, or nearly 3 full percentage points less than Chicago.
Last month, the index showed Chicago’s price growth as 6.67%. This month’s 7.23% shows that price appreciation is accelerating, not slowing down, here. By comparison, Las Vegas’ 7.28% this month is nearly a full percentage point below the figure for last month, 8.24%.
Local data also shows home prices keep going up.
The Illinois Association of Realtors reports the median price of homes sold was up 7.7% in both the city and the nine-county metro area.
The median price of homes sold in September was $350,000 in both Chicago and the metro area.
Nationwide, the median price of homes sold in September was $404,500, up 3% from a year earlier, according to data published by NAR.
This indicates that Chicago-area prices are growing at twice the pace of the nation’s.
Interest rates aren’t helping affordability.
When mortgage rates on a 30-year fixed rate mortgage hit 7%, it meant that a typical homebuyer has lost $33,250 in buying power in the past six weeks, according to a Redfin report.
What does high prices and high rates mean?
The number of homes sold in September was at a 13-year low.
Fewer homes sold in September, both in the city and in the larger metro area, than in any September since 2011.
In Chicago, 1,643 homes sold in September, a drop of 12% from the same time last year. The last time there were fewer sales in September was 2011, when 1,539 homes sold, when the nation was struggling to recover from the housing crash of 2007.
In the nine-county metro area, 6,967 homes sold in September, down 9.9% from September 2023. In 2011, the last time there were fewer sales in September, 6,171 homes sold.
Year to date, 2024 home sales are running lower than any year since 2012. In the first nine months of this year, 17,187 homes sold in the city, compared with 16,668 in 2012. In the metro area, 67,504 homes sold between Jan. 1 and Sept. 30 this year, and in 2012, 66,841.