Overnight averages for a 30 year fixed mortgage dropped to 5.76% in the Chicagoland area. A friend I ran into yesterday at Starbucks in Lincoln Square (yes, the only place open to get coffee on Jillian's and my walk) asked what I thought would happen in the spring market... with sales and mortgage rates.
First, it is generally expected that there will be an uptick in real estate transactions. This is a norm for spring statistically and will also reflect those who sat on the sidelines due to the gloom and doom reporting of this year. People wanted to wait and see what was to happen. I think now, with prices stable and good inventory, those looking to buy will make a commitment this spring season. I feel the number of purchases will be smaller than last years first quarter, but better than we saw in the third quarter of this year.
Many of my clients are planning to buy in the spring and are working with me now to see what is available at their price points. Plus, if new construction meets their needs, they may have to secure a unit now so it's done by the termination date of their apartment leases. I had advised they should be ready in the winter. Again, statistically speaking, better deals can be had from winter sellers. There are less buyers watching properties due to the holidays, so less competition for quality properties that hit the market.
Early last year, predictions were that interest rates would hit the 7% mark and probably stay there for awhile. This did not happen. We now see an average rate of 5.78% today and no predictions of 7+ rates for the future.
I think we will see a spring with many buyers who have sat on the sidelines and have watched things sort out. Interest rates will hover around 6%... maybe staying sub 6 like the last few months .