Homebuyer competition is increasing in Chicago, defying national trend, undeterred by rising interest rates.
In the Chicago metro area, 68.2 percent of buyers faced competing offers on homes in March, according to data from Redfin. That’s an increase from the prior month, when 67.6 percent of buyers faced competition — and a significant increase from March 2021, when only 52.8 percent faced other offers.
The findings in Chicago buck national trends, where overall competition is dropping from earlier this year, largely because rising interest rates are pushing more buyers out of the market, according to Redfin. Nationally, 65 percent of homebuyers faced multiple offers, down from 66.7 percent in February 2022 and 62 percent in March 2021.
“Most homebuyers are still encountering bidding wars, but competition is beginning to cool because surging mortgage rates and home prices are prompting some Americans to back out or put their buying plans on hold,” Redfin Chief Economist Daryl Fairweather said in the report. “We expect bidding wars to ease further in the coming months as rising mortgage rates price more buyers out of the market.”
Home prices in the Chicago region are still higher than average, but lower than March 2021, the height of the pandemic real estate market.
Within Chicago city limits, 2,287 homes sold this March, the data show. That’s down 3.7 percent from March 2021. Comparing this March with the five previous years’ March sales, sales are up 26 percent.
In March, home sales in the nine-county metro area totaled 9,865. That’s a decrease from last year of 10.3 percent. Comparing this March with the five previous years’ March sales numbers, they are up 11.1 percent in the entire metro.
Mortgage rates continue to climb from historic lows during the pandemic. The average 30-year fixed mortgage rate is at 5.11 percent, its highest level since 2010. Rates dropped to historic lows during the pandemic, and hit 2.65 percent in January 2021, according to Redfin.
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