Realtors say historic home sale prices have started to move sellers off the sidelines

By Kevin Haas
Rock River Current
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ROCKFORD — Local Realtors say record-breaking home sale prices and a dip in mortgage rates have started to mitigate the so-called “lock-in effect,” where homeowners are unwilling to sell and give up the historically low rates they locked in after the pandemic.

After four-consecutive months of historic high home sale prices, the inventory of homes on the market has ticked up to its highest level in three years. However, the number of monthly homes for sale is still just over a third of what it was pre-pandemic.

The three-month rolling average price of a home sold in October was $240,861, according to new data from the NorthWest Illinois Alliance of Realtors. That’s the second-highest average on record after September’s $242,241 average price.

The inventory of homes for sale reached 442 at the end of October, which is the highest since 464 in October 2022, according to the Realtors’ group.

“Significantly rising home equity due to record home prices has spurred on a large swath of homeowners, many of them in their homes a decade or more, to finally take action to take on a move-up home,” Conor Brown, CEO of the NorthWest Alliance of Realtors, said in a news release. “It’s great to see market supply increase so significantly to help meet pent-up demand.”

Inventory levels have been declining since the onset of the pandemic, when buyers took advantage of record low mortgage rates. The rate of a 30-year fixed mortgage was a historic low of 2.65% in January 2021.

Once homeowners were locked into those rates, they were less willing to sell, Realtors say. The average monthly inventory of homes on the market was 1,209 in 2019, before the pandemic spurred low mortgage rates. So far this year, the average monthly inventory is about 195, including a record low 150 homes at the end of March. The average monthly inventory was 298 in 2024, according to NorthWest Illinois Alliance of Realtors data.

The high demand from homebuyers and low supply of homes on the market has pushed prices to record levels here and across the country.

Mortgage rates have started to come down this year. The 30-year fixed mortgage rate fell from 6.43% last October to 6.25% this October. It stands at about 6.26% now, according to FreddieMac.

Despite higher mortgage rates, selling may make sense because of the big equity gains homeowners have made, Brown said.

“The average Rockford homeowner who has lived in their home 11.9 years (the average length of owning a home across the country) has seen the equity in their home rise from $102,506 to $240,086, a gain of 157%, a gain of $137,580,” he said. “Tapping into this existing equity for a better-suited home is making a lot of sense for many homeowners right now.”

A total of 385 homes were sold in October, up 3.5% over 372 homes sold in the same month last year. Homes sold in just 17 days in October. It was 20 days last October.

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