Chicago’s housing market continued its rebound last month as existing-home sales in the nine-county area grew 14.2 percent in June from last year — to their highest level since 2006.
Existing-home sales rose to 13,100 in June, the highest since June 2006, when 13,193 homes were sold, the Illinois Association of Realtors reported Wednesday.
Also fueling the rebound are median housing prices, which, at $232,500, were 5.7 percent higher than a year ago, the trade group said.
Homes sales in the city of Chicago surged 9.3 percent, to 3,110 properties moved, at a median price of $290,000, up 5.5 percent from a median price of $275,000 reported a year ago.
Median prices on condominiums in the city, however, grew at a slower pace, rising 4.5 percent from a year ago to $324,000. Inventory in the city remains tight, down 10 percent from last year.
The number of condo units sold rose 8.4 percent to 2,027 from a year ago.
The burst in home sales growth was unexpected last month and it could be just a “one-month blip,” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois.
“We forecasted positive sales growth but not of this magnitude,” he said adding, “We’re very hesitant to say that it’s the start of a robust trend.”
Nor does the report signal a bubble forming. Adjusted for inflation, “We’re only at 89 percent of 2007 prices,” Hewings said. “Our prices are recovering in a classic Midwest, modest way.”
Nationally, existing-home sales increased 3.2 percent to a seasonally adjusted annual rate of 5.49 million homes, putting sales at their highest level since February 2007’s 5.79 million, according to the National Association of Realtors.
The strong uptick in activity, as well as fewer cash sales, larger average loan sizes and more loans getting approved, has caused the Mortgage Bankers Association to significantly boost its outlook for mortgage originations that it made just a month ago.
Home-purchase mortgage originations are now expected to increase to $801 billion, compared to a previous forecast of $730 billion.
“We expect this trend to continue into 2016 and beyond, as the broader economy and job market continue to improve,” Mike Fratantoni, the association’s chief economist, said in a statement.
The association also said it expects mortgage rates to hit 4.5 percent by year’s end.
Helping keep prices high in the Chicago area is the lack of homes listed for sale. Housing inventory in most counties was down in June, with the exception of Lake and DuPage counties, where inventory rose 1 percent and 4 percent, respectively.