After a slight rebound in May, the number of home sales plummeted in June, continuing a run of tough times for home sellers.
Some 12,002 homes sold in the nine-county Chicago metro area last month, a drop of 11.6 percent year over year, according to the Illinois Association of Realtors. About 100 fewer homes sold in June than the previous month.
The 11.6 percent drop is the biggest year-over-year slump of any month this year, all of which recorded declining home sales. Only December had a bigger drop, with sales declining by 16.5 percent year over year. June was at least the seventh straight month with a year-over-year decline in sales.
May has been the best month for home sales this year, with the number of closed deals dropping by only 3.6 percent year over year.
The drop in sales come even as market time and inventory have increased, which are generally considered good signs for buyers. But with home prices continuing to rise, affordability might once again be impacting the market, Geoffrey J.D. Hewings, director of Regional Economics Applications Laboratory at the University of Illinois, said in a statement.
Home prices in the Chicago area grew by 0.2 percent to a median of $263,000 last month, according to the Realtors association. Prices grew by 1.6 percent in the city itself, where the median hit $319,000.
The steady — if not stellar — home price growth, coupled with a rise in apartment rentals and declines in consumer confidence are deflating home sales, Hewings said.
“Many potential home buyers are sitting on the sidelines, no doubt influenced by concerns about trade conflicts and the future growth of the economy,” he said in a statement.
Another factor impacting home sales is property taxes, with assessments in some areas soaring and with future tax hikes being considered, Tommy Choi, president of the Chicago Association of Realtors, said in a statement.
“We can’t escape the topic of tax increases right now, and prospective buyers are paying attention,” Choi said.
One bright spot in the Realtors report: Mortgage rates remain low. The average monthly mortgage rate for Illinois in June was 3.8 percent, down from 4.7 percent in June 2018, according to the report.