Inflation Continues to Affect the Housing Market

By The Center Square
The Center Square
The Center Square
The Center Square was launched in May 2019 to fulfill the need for high-quality statehouse and statewide news across the United States. The focus of our work is state- and local-level government and economic reporting. www.thecentersquare.com
July 28, 2022 Updated: July 28, 2022

Illinois home prices have continued rising as sellers shoot for the moon with the list price of their homes.

The statewide median price went up 5.9 percent to $286,000 in June compared to June 2021. Add higher mortgage interest rates, and some buyers have decided to stay on the sidelines for now, while others end up in a bidding war for a house.

“In my own district, which is central, west-central Illinois, kind of the heartland of America, properties for sale are getting 15 to 18 offers in some cases, leaving many potential home buyers discouraged and exhausted,” Illinois U.S. Rep. Darin LaHood, R-Peoria, said during a recent U.S. House Ways and Means Committee hearing on housing.

In the Chicago Metro area, the median home sale price in June was $340,000, an increase of 6.6 percent from June 2021.

Nationally, record-high home prices are up more than 31 percent over the past two years, according to Realtor.com June list price data. And they keep rising.

Home prices typically spike in the summer. Larger, more expensive homes go up for sale in the summer, and families eager to be settled before their children start school in the fall compete for them. But there still aren’t enough homes for sale to go around.

Inventories are still tight around the state. The number of homes for sale statewide was nearly 26,000 in June compared to almost 31,807 in June 2021, an inventory decline of over 18 percent.

LaHood said the Biden administration’s economy is crushing Illinois families.

“When we think about the genesis of the inflation crisis we are in right now, the bottom line is the federal government spent way too much money,” LaHood said. “We have pumped $7 trillion into the economy of taxpayer money over the last two and a half years.”

The big question on the minds of homebuyers and sellers alike is when are home prices going to fall? Many real estate experts anticipate the rate of price growth will slow as the year progresses.

Ultimately, the effect on prices will depend on individual real estate markets. Areas where home prices dramatically spiked during the pandemic are most likely to come down.

By Kevin Bessler

The Center Square was launched in May 2019 to fulfill the need for high-quality statehouse and statewide news across the United States. The focus of our work is state- and local-level government and economic reporting. www.thecentersquare.com