By Kevin Haas
Rock River Current
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ROCKFORD — Home sale prices in the region continued their record-high run to start the year despite rising interest rates, according to the first new housing stats of the year from Rockford Area Realtors.
The three-month rolling average price of a home sold in Boone, Winnebago and Ogle counties hit $166,493 in January, according to the Rockford Area Association of Realtors. That’s the highest January price on record and in the top 10 all time for monthly average prices. The highest ever monthly price was $179,351 in September.
The January price was up more than 5% from a year ago, when the rolling average price was $157,916.
Related: 5 expectations for Rockford’s real estate market in 2022
The low availability of homes on the market continues to drive up prices, but there was a bright spot in January. New listings were up 17% from 277 new homes last January to 325 this year. However, with 329 homes sold in January the new listings aren’t enough to keep pace with the demand.
“We are excited to see the jump in new listing activity for January,” Conor Brown, CEO of Rockford Area Realtors, said in a news release. “For the past few months listings have only been slightly ahead of the previous year’s numbers, otherwise they’ve been trending below historical levels. This limited availability of homes is an ongoing challenge to buyers successfully finding and closing on a home.”
The 329 homes sold in January was the largest number for that month since 2007, and it was up nearly 4% from January 2021.
Related: ‘Remarkable and unparalleled’: 2021 was a ‘housing boom’ in the Rockford area
The active inventory of homes on the market was down 7% with 334 homes for sale at the end of January, Realtors data shows.
“Despite—and perhaps even because of—rising mortgage rates, buyers have entered the 2022 housing market ready to compete,” Brown said. “Between looming rate hikes, rising home prices and surging rents, today’s home shoppers have plenty of motivation to close while monthly costs might still be affordable.”
Some mortgage rates surpassed 4% in the second week of February, moving higher than expectations, the Realtors group said. The average 30-year-fixed rate mortgage climbed to 3.92% for the week ending Feb. 17, up 23 basis points from the previous week to the highest level since May 2019.
“As interest rates and house prices rise, affordability starts becoming an issue for some potential homebuyers, particular first-time homebuyers,” Brown said. “That’s why we’re seeing a burst of homebuyer activity early this year, especially as inflation threatens to place a strain on consumer budgets.”
Related: Rockford home prices keep rising. Should you buy now or wait for a dip?
Still, Brown said rates are low enough that they make buying now worth it long-term.
“The good news is, even though rates are climbing, they’re still worth taking advantage of,” Brown said. “Historical data shows that today’s rate is still well below the average for each of the last five decades. If you’re looking to buy a home, rising mortgage rates should be an incentive to act sooner than later.”
This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on Twitter at @KevinMHaas or Instagram @thekevinhaas.