What 2024 holds for Chicago real estate
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Illustration: Brendan Lynch/Axios
Chicago real estate experts predict the market will be less stagnant — but not wildly different — in 2024.
Why it matters: Many home shoppers stood still this year, waiting for mortgage rates to drop before they made a move.
- Major forecasters now expect rates to dip at least a little.
What they're saying: "People are going to get tired of putting their lives on hold," says Chicago broker Mary Jo Nathan, who tells Axios she anticipates more homes for sale.
Zoom in: Those who do walk away from low-interest mortgages will probably be high-equity homeowners who buy their next place with cash, says local broker Wayne Beals.
Zoom out: If the economy is steady, rates could land around 6%. If the economy stumbles, mortgage rates could fall more significantly, says Greg McBride, Bankrate's chief financial analyst.
- No one can say with certainty just how much mortgage rates will change because they are impacted by inflation and the Federal Reserve.
Between the lines: Lower mortgage rates won't clear all buyer hurdles, and actually could push home prices higher if demand surges and inventory remains low.
- Yes, but: "Moving is first and foremost a life decision," Opendoor's Merav Bloch tells Axios.
What's happening: The Fed left interest rates unchanged at its final policy meeting of 2023 and signaled next year could bring cuts, Axios' Neil Irwin and Courtenay Brown report.
By the numbers: Chicago is short around 142,000 homes, according to figures global developer Hines shared with Axios.
- That's 3.7% of the metro area's existing inventory as of 2022.
State of play: America needs three million more housing units, per the analysis, a shortage that's pushing up the cost of renting and buying.
- Hines compared the stock of existing homes, either to rent or buy, with what they calculated is the population's housing demand.
- The analysis includes housing units as defined by the census, which excludes dorms, skilled nursing facilities or other group quarters arrangements.
Go deeper: Chicago has scaled back on new apartment construction in recent years.