October 2026 market update

The median home sales price is up $3,000 month over month and now sitting at $348,000. In September of 2025, the median sale price was $328,000. Fun, but not so fun fact, over the last 3 years, July 2023 was the only month we saw a decrease in the median sales price. (Data according to InfoSparks by MRED).

Why are prices continuing to rise in our market even though the state of our economy is uncertain and interest rates are rising? In my opinion, low inventory continues to drive prices up. Despite interest rates sitting at above 7%, demand remains high while inventory is low. And what's the first basic rule of economics? Scarcity. More people want a house (demand) than people that want to sell a house (supply), resulting in higher prices. So in theory when could we see prices decline? When demand slows down and inventory increases. Rising interest rates are meant to slow down demand in the economy. The question that remains is will rising interest rates slow down demand disproportionately to inventory levels. I do not have a PhD in economics and I am not going to make a prediction on what we can expect. What I will say is I will continue to monitor interest rates, inventory, and prices over the next few months and interpret that data as it comes in.

For the 4th straight month the number of new listings decreased. In August there were 167,513 new listings, last month we had 166,594 new listings. There was also a decrease in the total number of homes for sale down from 18,035 in August to 17,907 in September. Zooming out, March of 2024 was the lowest inventory levels we experienced and at that time there were 16,933 homes for sale. We are not far off from that number. (Data according to InfoSparks by MRED).

According to Freddie Mac's Primary Mortgage Market Survey, the 30-year average fixed mortgage rate is 7.28% (10/1/2026). Our last monthly market update rates were at 6.71% (9/3/2026). Rising interest rates have been the hottest topic in real estate over the last month and for good reason. Rates have jumped quite a bit. This is in the wake of the Fed raising the federal funds rate by a quarter percentage point to 3.75% to 4% last month. Again, increased interest rates are meant to slow down the economy in order to reduce inflation. The goal is to curb inflation so in time interest rates can come back down. It's my own personal opinion that high interest rates are a large, if not the biggest, contributing factor to low inventory. The reason I say that is because nearly half of Illinois mortgages, 48.7%, had interest rates below 4% as of the second quarter of 2026, according to an analysis of FHFA's National Mortgage Database. Why does that matter? Because for the average homeowner who has a 4% or below interest rate, buying a new home is now an increasingly difficult financial decision to make. Their monthly mortgage payment will increase significantly due to the +3% increase they will experience with a new interest rate. There are many more reasons for low inventory, but again that's just my opinion and my logic is owners with inexpensive mortgages have a strong incentive to stay put, restricting homes available for sale even as buyers' purchasing power falls.

I hope this information is helpful to you. I like my clients to be informed by real localized data rather than massive news headlines in other markets. I am happy to go deeper on any of this if you'd like a one on one conversation about your real estate goals.