Rockford region sees highest home sale totals in 9 months

By Kevin Haas
Rock River Current
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ROCKFORD — The region saw an uptick in the number of homes sold last month as the inventory of properties on the market reached its highest level in 10 months.

A total of 351 single-family homes and condominiums were sold in May in Winnebago, Boone and Ogle counties, according to the Northwest Illinois Alliance of Realtors. That’s down nearly 5% from May 2022, but it was the highest monthly sales total in nine months. Also, home sales had a steeper drop last year, when the region saw a 13% drop in home sales from 2021 to 2022.

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The total of 442 homes that came onto the market in May was the highest since 455 in August, according to the Realtors group. However, that’s still lower than 479 in May 2022 as the tight housing market continues.

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The latest data also shows that average sale prices are continuing to rise year over year. May’s three-month rolling average home sale price was $187,354, which is nearly 5% higher than the average in May 2022.

However, May’s price increase was just the fifth-highest average in the past year, and the average annual home price increase was about 6% in 2022.

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The local Realtors group released its latest data as a new report from Goldman Sachs shows that buying a house is the hardest it’s been in nearly 30 years in the United States. Goldman Sach Housing Affordability Index shows housing affordability is at its lowest levels since 1996, largely because of sharp increases in mortgage rates.

The average 30-year fixed-rate mortgage was 6.43% in May, up from 5.23% a year ago. Last year’s high was 6.9% in October.

“The primary driver in the market is still the fact that you face the most significant increase in mortgage rates in many decades,” Conor Brown, CEO of Northwest Illinois Alliance of Realtors, said in a news release. “But that hasn’t stopped our buyers from getting into the marketplace.”

The latest data shows the pace at which homes move off the market has also started to pick up again. Homes sold in an average of 17 days last month, the fastest pace since 15 days in September. The record speed was an average 10 days in July.

Rockford’s relative affordability is part of what is driving home sales, according to the Realtor’s group. The average price of a home sold in the region in May was almost $88,000 less than the statewide average of $275,000. And, the average home in the U.S. cost $396,100 in May. That’s more than double the cost of a Rockford area home.

“Housing affordability has begun to improve over the last few months — as home price increases have moderated and mortgage rates dropped a bit,” Brown said. “Still, I would say the biggest driver in affordability is the extent to which you had appreciation in terms of prices in the year prior to that, that’s really what really drives it.”

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on Twitter at @KevinMHaas or Instagram @thekevinhaas.