Illinois home sales have been trending up in the last four months and so have median home sale prices since March, despite a dip in consumer confidence over higher gas prices and lackluster job creation.
In the May Illinois housing market report out today from the Illinois Association of REALTORS®, homes sales were up 13.9 percent from April, although down year-over-year. Similarly, the statewide median home sale price moved up from April to $140,000 while down from a year ago in May.
These year-over-year sales comparisons are expected to turn positive for both Illinois and the Chicago region in July and August as the effect of the homebuyer tax credit—which accelerated sales in the first half of last year—fades away, according to the forecast prepared by economists from the University of Illinois Regional Economics Applications Laboratory (REAL).
High affordability conditions continue with low mortgage interest rates and lower home prices making this an opportune time for buyers, although Illinois brokers across the state are reporting among the biggest road blocks for getting a home loan secured today is overly strict and cumbersome lending requirements.
This is happening nationwide. “There’s been a pendulum swing from very loose standards which led to the housing boom to unnecessarily restrictive practices as an overreaction to the housing correction – this overreaction is clearly holding back the recovery,” said economist Lawrence Yun in the National Association of REALTORS® home sales report also issued today.
A growing chorus of market analysts are saying a healthy job market fuels the housing market, and that housing creates jobs.
- Moody’s Analytics chief economist Mark Zandi was quoted in CNN Money: “The economy can move forward without housing. But I don’t think it can flourish and create enough jobs to bring down unemployment in a significant way without a revival of the housing market.”
- Fannie Mae chief economist Doug Duncan: “Ultimately, the labor market holds the key to a housing recovery, but job growth is needed in order to activate housing demand.”
- IAR’s recently released study on housing’s economic impact shows just one home sale in Illinois generates $28,581 in direct expenditures made by both the seller and the buyer. The resulting ripple effect across multiple industries for home improvements, moving and warehousing and others adds up to $7.9 billion a year in direct and indirect expenditures fueling the Illinois economy plus 85,677 jobs.