Case Shiller: Chicago Area Home Prices Not Yet Affected By Higher Mortgage Rates

Case Shiller: Chicago Area Home Prices Not Yet Affected By Higher Mortgage Rates

So far Chicago home prices appear to be bullet
proof against higher mortgage rates

S&P Dow Jones CoreLogic released the April Case Shiller home price indices for the Chicago area and the nation and there is still no sign of higher mortgage rates slowing down home price appreciation. But in all fairness the April data is really an average of the three months ending in April so it’s a bit too soon to declare a non-event. 

The nation’s home prices advanced 20.4% over the prior 12 month period, which is only down slightly from the 20.6% number for March. The Chicago area continues to lag the rest of the country, coming in 2nd to last place among the 20 metro areas followed with 13.0% appreciation. That’s up just a tad from March’s 12.9% and it’s the 12th consecutive month with double digit year over year gains.

Condominium/ townhome price appreciation set another record for annual price appreciation over the last (almost) 8 years of 6.7%.

Chicago area single family home prices have shown annual gains for 114 consecutive months.

Craig J. Lazzara, Managing Director at S&P DJI, tried to make the case that the slight decline in home price appreciation from March was actually a sign of mortgage rate related slowing. But I did not find him persuasive. However, he did point out that this data does not yet reflect the highest mortgage rates we’ve seen recently:

We noted last month that mortgage financing has become more expensive as the Federal Reserve ratchets up interest rates, a process that had only just begun when April data were gathered. A more-challenging macroeconomic environment may not support extraordinary home price growth for much longer.

Case Shiller Chicago Area Home Price Index By Month

The graph below shows the actual Case Shiller Chicago area index values by month going back to 1987 along with a trend line that I developed based upon pre-bubble single family home prices. Single family home prices rose by 1.9% from March. Now there is a lot of seasonality in these numbers but, still, that just happens to be the largest one month change in 8 years. Condominium prices rose by 1.1% in that one month.

That trend line is really interesting because ever since the housing crash prices fell below the line and stayed there for about 10 years. Only since the pandemic have we started to close the gap, which is still 17.1%.

Single family home prices have risen 76.4% from the bottom of the housing crash and now surpass their previous peak by 7.5%. Condos and townhomes have jumped 70.2%, finally passing their peak by 2.9%.

The Chicago area real estate market finally surpassed bubble peak prices in August and may actually catch up to the trend line.

#ChicagoHomePrices #CaseShiller #HomePrices

Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.

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Gary Lucido

After 20 years in the corporate world and running an Internet company, Gary started Lucid Realty with his partner, Sari. The company provides full service, while discounting commissions for sellers and giving buyers rebates.

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