Chicago Home Loan Rates Likely to Stay Low—for the Moment

 Last week, Chicago residents who found themselves at any stage of preparing to buy or sell Chicago homes had to have been motivated by what came out of Washington. Last Wednesday was the day the Federal Reserve officials were set to announce their new target for the benchmark federal funds rate. That’s the key trigger for future Chicago home loan rates, which largely determine how attractive (or not) upcoming loan packages offers will be.

Since any rise in rates raises monthly payment amounts—even if the underlying size of the loan remains the same—potential buyers and sellers have reason to watch what the Fed does with varying degrees of apprehension. Lately, strong economic performance has made it increasingly likely that rate rises will be forthcoming—and in its announcement, phrases like, “the economy is growing at a strong pace” were included. Earlier pronouncements have strongly indicated that three or four target raises are likely this year. So far, there have been two.

The news was encouraging for those with homes currently on the market, or soon to list—as well as for those looking to buy. Not only did the Open Market Committee announce that the target rate would remain unchanged; they also indicated a raise would likely be forthcoming soon. In other words, Chicago’s current historically low home loan rates won’t be nudged upward by the Fed, but only for the moment.
It’s the real estate equivalent of one of those “Hurry before the sale ends!” furniture ads on TV—or the weekly grocery store specials insert with an end-of-the-week expiration date.
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Unlike either of those, buying or selling a home is such a major purchase that the Chicago home loan rate is only one element of what makes a decision that will be seen as a fortuitous one over the years and decades to come. I hope you’ll call me to lay out Chicago’s current offerings as well as the level of activity sellers can expect in the weeks and months to come!