Housing Bubble

Illinois home sales ahead of last year

May 28, 2003

SPRINGFIELD, Ill., -- The median price of an existing single-family home in Illinois in April increased 5.4 percent and sales increased 2.3 percent compared to one year ago, according to home sale reports compiled by the Illinois Association of REALTORS®. Statewide sales of existing homes in April totaled 9,972, compared to 9,748 sales in the same month one year ago. The statewide median price of existing single-family homes rose to $167,902, a 5.4 increase over the $159,300 statewide median price reported in April 2002.

"We have seen a dramatic upsurge in housing activity in the last month. A continuation of four-decade low mortgage interest rates could drive the housing market to be the second-best year on record," said Toni Sherman, president of the Illinois Association of REALTORS®. "We are anticipating an improving economy in the summer months as consumer confidence starts to rebound in this post-war period thus driving retail sales and spending higher. Historically low interest rates are opening the door to homeownership to many people who otherwise could not afford a home."

Record-low interest rates hovered at 5.90 percent throughout the month of April. This is the average commitment rate for the North Central region, according to the Primary Mortgage Market Survey conducted by the Federal Home Loan Mortgage Corporation.

This figure is down 1.15 percentage points from the 7.05 percent rate during April of 2002. The statewide average home price rose 5.1 percent to $194,435 compared to $185,000 during the same period last year.

In the Chicagoland Primary Metropolitan Statistical Area (PMSA), existing single-family home sales totaled 6,291, down just 1.6 percent from 6,392 home sales in April 2002. The median existing single-family home price in the Chicagoland PMSA last month was $221,000 up 10.9 percent from $199,300 in April 2002. The IAR survey covers non-seasonally adjusted sales figures and median prices for existing, detached, single-family homes sold in 37 local association markets throughout Illinois.

The National Association of REALTORS® predicts only a slight interest rate increase in the next twelve months, with rates reaching 6.6 percent on a 30-year fixed-rate mortgage in 2004. "The Federal Reserve will keep a watchful eye on interest rates and may be forced to lower rates again if the economy does not improve. With home sales already ahead of last year despite a slowdown during the period of the Iraq war in the first quarter, it appears the housing market will continue to flourish well into the summer," said Sherman.

The Illinois Association of REALTORS® is a statewide trade association whose 42,000 members are engaged in all facets of the real estate industry.

The IAR first quarter 2003 statistics are published at the IAR Web Site

Source: Illinois Association of REALTORS