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Buying a Chicago Home in an Environment of Rising Rental Prices

As the cost of living continues to rise in the Chicagoland area, many residents are finding themselves struggling to keep up with rising rent prices.

According to a recent article in Forbes, average rents in this region have reached the highest point ever, making it increasingly difficult for renters to afford a comfortable and secure place to live.

While Chicago is the nation’s third-largest city (and the most expensive in the Midwest when compared with other U.S. cities), the cost of living is still quite reasonable. Home purchase prices, for example, while exceeding national averages, are much, much lower than some of the U.S.’s other most desirable urban areas

Let’s take a closer look at why now could be the perfect time for you to lose the lease and realize your dream of owning your own home. 

Making the Best Use of Your Money

According to the Chicago Tribune, purchasing a home here is a relative bargain. The median home value in Chicago is currently around $268,000, which is certainly lower than cities like San Francisco, where it’s around $1.3 million, and New York, coming in at over $750K.

At the same time, Chicago rents have climbed at an impressive clip over the last couple of years. Rental prices grew 9% from November 2020 to November 2021, and an additional 8.6% from late ‘21 to November 2022. That boosted the average rent payment from $1,626 per month in 2020 up to a whopping $1,925 before the end of 2022.

Depending on your specific financial outlook, purchasing a property at this time could end up being a much better option than paying exorbitantly high rent every month. There are many programs for first-time home buyers, including assistance with down payment and closing costs, available through local municipalities, the state of Illinois, and the federal government:

In this situation, it just makes sense to consider the benefits of having a house payment that remains consistent over time and that also helps you gain certain advantages. An experienced mortgage lender can help you evaluate your financial situation and find the right loan for your needs.

Forward Thinking

While dealing with a landlord may seem like the more affordable option in the short term, there are actually several benefits to purchasing a home instead. Here are just a few reasons why you should consider buying rather than remaining a renter:

  1. Stability and security: When you’re a homeowner, you have the security and stability of knowing that you have a place to live that is completely yours. You won’t have to worry about your rent increasing suddenly or your lease not being renewed. 
  1. Customization: You’ll have the freedom to make your home exactly how you want it. Create a special place for your family, indulge your love of DIY, or renovate according your accessibility needs
  1. Long-term savings: While the upfront costs of purchasing real estate can be substantial, over time, owning a home is usually cheaper than renting. As you pay down your mortgage, the amount of interest you pay decreases, and you’ll eventually own your home outright. This means you’ll have a valuable asset that you can sell or pass on to your children, and you’ll no longer have to pay for housing costs.
  1. Building equity: When you rent, you’re essentially throwing money away each month. But when you own a home, you’re able to build equity over time and as the value of your home increases. This can be a powerful way to create wealth in the long term.
  1. Tax benefits: Owning a home also provides several tax benefits, including the ability to deduct your mortgage interest payments and insurance premiums on your taxes. This can be a significant savings, especially if you’re in a higher earning bracket.
  1. Strengthening your community: Owning a home can also provide an invaluable sense of belonging. You’re more likely to become involved with local organizations and to form connections with your neighbors. This can be especially important for families with children, as it provides a essential support network for them.

Of course, buying a home is not right for everyone, and it’s important to carefully consider your own financial position and overall goals before making such a big decision. 

But for those who are ready to take the leap, purchasing property in Chicago can be a smart investment that provides both tangible and intangible returns. With the rising cost of rent in this market, now is a great time to start exploring your options. 

You don’t have to navigate this journey on your own — I’m here to help you every step of the way, from prequalifying for a mortgage to receiving the keys to your new home. Reach out today!

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