If the entire home buying process has given you battle fatigue, don’t quit just yet! Chicago home inventory has improved in the past few months, especially for townhomes and condos. And while interest rates are up a bit from last year, the difference is only about 1%, give or take. Instead of heading for the bench, you should stay in the game. Here’s why!
Chicago home price growth is slowing. This doesn’t mean the market is about to reverse course. Prices are still rising; they’re simply not rising as fast. This is a natural effect of more homes being on the market, and fewer buyers being active in the fall and winter months. Keep in mind that the Chicago area real estate market is always changing, and every neighborhood has its own market conditions. Home supply and home demand, along with the popularity of a given location, will always influence local prices.
Home sellers are negotiating. According to statistics by the National Association of REALTORS©, about 44% of home sellers reduced their asking prices in October. This indicates that sellers are seeing fewer buyers, or more competing homes on the market, or both. Aside from adjusting their asking price, sellers have also shown more willingness to chip in towards buyer closing costs.
The supply of entry-level homes remains limited. We’re seeing more homes on the market than we did this time a year ago, but this isn’t a windfall. More expensive homes are taking longer to sell, yet affordable homes can still be tough to find. Entry-level homes will always have buyers, whether they are owner-occupant home buyers or investors. It could take time to find the home right for your needs and budget. Just don’t engage in deliberate procrastination; it isn’t going to help. For incentive, look at these home price changes in a 5-year comparison:
- City of Chicago median home price, 2013: $220,000
- City of Chicago median home prices, as of October 2018: $272,500
Mortgage interest rates are still digestible. Ok, so you missed the bargain-basement rates of a couple years ago. The truth is, the rate environment today doesn’t look tremendously different from where we were 5 years ago. For example:
- 30-year fixed rate mortgage averages, October 2013: 4.23%
- 30-year fixed rate mortgage averages, October 2018: 4.83%
Remember too, that mortgage interest rates change daily. They are influenced by the financial markets and the direction of the Federal Reserve. If you dig numbers and want to watch how rates are behaving, you can view the weekly averages at FreddieMac.
Of course, we’re not saying that home buying is easy. Or cheap. We’re saying that when you take the long view, now might be a better time to buy a home than you thought! The best way to be confident about home buying is to be well-informed. Give yourself the advantage of a home buying education and expert home buying guidance!
StartingPoint Realty – serving first-time home buyers since 2004!
StartingPoint Realty proudly serves first-time home buyers throughout Chicago and the Northwest suburbs. Get an introduction to home buying by attending our free home buying seminar! There’s no sales pressure and no obligation. Space is limited, so please register your choice of location and date to reserve your seat!
Always feel welcome to contact us for help with your Chicago home buying questions!
Ryan Gable Broker/CEO Starting Point Realty
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