(The Center Square) – What is in store for the Illinois housing market in 2024 is uncertain, but inventories and interest rates are expected to be a major factor.
One industry analyst says the U.S. is short by 5 million homes. That is one reason many homeowners chose to stay put in 2023, leading to a seller’s market.
According to Illinois Realtors, year-over-year home sales continued to drop at the end of last year as available housing inventory remained tight. In November, there were only 20,568 homes for sale in Illinois, a 22.2% decrease from November 2022.
Analyst Meredith Whitney is predicting that the supply of homes for sale will go up in 2024, driving home prices down. The reason: a wave of baby boomers will look to downsize and put their homes on the market.
“Americans are sitting on a tremendous amount of equity in their homes,” Whitney said. “It’s a question of when they tap into it.”
Jamie Seale with Clever Real Estate agrees and expects prices to slowly decrease this year.
“They have come down a little bit but with the housing shortage, they have come down, but not a lot,” Seale said. “The median home price right now is $431,000, which is a lot.”
That is compared to a median price of about $265,000 in Illinois, but that is 9.5% higher than last year.
Added into the mix for home buyers is the fact that Illinois has among the highest property taxes in the country.
“We are trying to help consumers and their communities grow by advocating for the elimination of all types of burdensome property taxes and the creation of incentives for the construction of high-quality new houses that are affordable,” said Matt Silver, president of Illinois Realtors.
Interest rates continue to drive the market. According to the Federal Housing Finance Agency, 70% of all mortgages are less than 4%, prompting many homeowners to stay where they are.
Based on the Freddie Mac data, the monthly average commitment rate for a 30-year, fixed-rate mortgage was 7.46% in November 2023, down from the previous month of 7.62%.