(Above) Homes in the Edgewater Square II development. Prices for single-family homes in Edgewater increased 22.9 percent in the second quarter of 2020 to a median of $775,000.
20-Jul-20 Home loan interest rates have plummeted to a historic record low of 2.98 percent nationwide, the lowest ever recorded by Freddie Macs Primary Mortgage Market Survey, which dates back to 1971.
Mortgage rates fell below three percent for the first time in 50 years, according to Sam Khater, Freddie Macs Chief Economist. The drop has led to soaring home buyer demand.
However, the countervailing force for the economy has been the rise in new virus cases, which has caused the economic recovery to stagnate, said Khater (left). This economic pause puts many temporary layoffs at risk of ossifying into permanent job losses.
Average benchmark 30-year fixed-rate mortgages (FRM) fell to 2.98 percent for the week ending July 16, down from 3.03 percent the previous week. A year ago, the 30-year FRM averaged 3.81 percent.
Fifteen-year fixed loans averaged 2.48 percent, down from 2.51 percent a week earlier. A year ago, 15-year fixed loans averaged 3.23 percent.
This means Chicago home buyers and families seeking to refinance now have a once-in-a-lifetime opportunity to lock in the lowest mortgage interest in five decades.
On July 17, Mutual of Omaha was quoting a rock bottom 3 percent, reported RateSeeker. Under an aggressive loan program involving pledged money market funds, Huntington Bank was quoting 2.325 percent on a seven-year jumbo adjustable-rate mortgage (ARM) with 25 percent down payment, according to mortgage broker Brian Bockholdt.
Before the recent sharp dip in interest charges, mortgage rates last reached a historical rock bottom on November 21, 2012, when the 30-year fixed mortgage average hit 3.31 percent, according to Freddie Macs archives.
North Side home sales contracts surge
While overall closed home sales in June were down, there was a surge in sales contracts written but not yet closed, noted Mary Jo Nathan, who compiles the quarterly Chicago North Side Market Report for the Charese Team at Compass Roscoe Village.
North Side contracts were up 14.4 percent in June compared to the same month last year and the gains were extremely strong in three communities: Edgewater, North Center, and Lakeview, which all had increases of 30 percent or more, said Nathan (right).
The report tracks home sales in nine neighborhoods Edgewater, Lakeview, Lincoln Park, Lincoln Square, Near North Side, North Center, Rogers Park, Uptown, and West Ridge.
Second quarter closed sales activity declined almost equally in the detached and attached segments of the North Side market. Detached sales were down 32.2 percent to 215 homes, while attached sales, mostly condominium units and townhouses, fell by 33.2 percent to 1,908 units.
However, the median price for the two categories moved in opposite directions. Sale prices of condos and townhomes rose 7.9 percent to $369,450, while median prices of detached single-family homes fell 9.7 percent to $935,000.
The average time it took a listing to go under contract increased only modestly during the second quarter across the North Side. Attached homes averaged 75 days, up eight days from a year earlier, while detached homes averaged 112 days, a six-day increase.