Home sales rise in Chicago metro area, median price up in the city

Home sales in the Chicago area rose, but prices fell last month, according to data released Thursday. The news was better in the city of Chicago, where sales and prices rose.

In the metro area, sales rose 13.3 percent in September, to 6,035 sales, but the median price fell 8.6 percent, from $175,000 to $160,000, the Illinois Association of Realtors said Thursday.

In Chicago, home sales rose 6.8 percent from a year ago, to 1,498. The median price increased 5.6 percent to $190,000.

“The housing market is showing some positive signs in terms of sales volume, yet sale prices remain lower,” Geoffrey Hewings, director of the University of Illinois’ Regional Economics Applications Laboratory, said in a statement.

Hewings forecast total home sales in the state will be higher in October and November on a month-to-month and year-over-year basis. He expects more sales of homes priced less than $100,000.

Statewide, sales rose 13.5 percent, and the median price fell 5.6 percent to $136,850.

“The slow economy and job recovery are severe drags on the market, plus many able buyers are hitting roadblocks on financing a home purchase due to the over correction in mortgage underwriting requirements,” said association President Loretta Alonzo, in a statement.

Nationally, the number of sales fell to a seasonally adjusted annual rate of 4.91 million homes, the National Association of Realtors said. The pace matches last year’s sales figures, which were the worst since 1997.

Economists say home sales need to be closer to 6 million to be consistent with a healthy housing market.

“This is a significant barrier to recovery,” said Ian Shepherdson, chief U.S. economists for High Frequency Economics.

Home sales are tumbling, even though mortgage rates are at record lows. This week, the average rate on the 30-year mortgage ticked down to 4.11 percent. Just two weeks ago, it fell below 4 percent for the first time ever.

Most people don’t want to go into debt to purchase depreciating assets, even if they can get low mortgage rates, Shepherdson said.

“Housing will recover in time as the labor market picks up and people start moving around the country to take up new jobs, but for now the market is dead,” he said.

Contributing: AP