Are you wondering whether it’s better to buy or rent a home in Chicago?
With the current state of the real estate market, it’s no surprise that this is a common question. As a Co-founder and Managing broker at Vesta Preferred Realty in Chicago, I have the expertise to help you make an informed decision. In this article, I’ll weigh the benefits of both renting and buying, the costs associated with each, as well as current and future real estate trends. By the end of this article, you’ll have all the information you need to decide which option is best for you.
Current Real Estate Market in Chicago
Home prices in Chicago have continued to rise, albeit at a slower pace compared to previous years. The median home price in the city is around $300,000, which is down 5.1% from last year. This trend is expected to continue, but at a more moderate pace. Furthermore, inventory levels of homes for sale in Chicago have been tight in recent months, with fewer homes on the market compared to previous years. In terms of interest rates, the Mortgage Bankers Association predicts that they will likely decrease to the mid-5s by the end of 2023, with a potential further drop to the 4s once buy-downs expire. It’s worth noting that recent data suggests that rates may go down if inflation stabilizes.
Benefits of Renting a Home in Chicago
Renting a home in Chicago offers a variety of advantages, including flexibility, reduced maintenance and repair costs, and the ability to live in more desirable neighborhoods at a lower cost. When you rent, you have the freedom to move more easily, whether you’re relocating for work or simply seeking a change of scenery. Additionally, you don’t have to worry about the costs and responsibilities of maintenance and repairs, as those are typically handled by the landlord. Lastly, renting can allow you to live in more desirable neighborhoods that may be out of reach if you were looking to buy.
Benefits of Buying a Home in Chicago
Owning a home in Chicago can offer some amazing benefits, including the potential for building equity over time, the ability to customize and make changes to the property, and the stability that comes with owning a home. By buying a home, you’re not just securing a place to live, but you’re also investing in an asset that has the potential to appreciate in value over time. This means that as the value of your home increases, so does your equity. By building equity through homeownership, you can create a significant financial asset for your future. Additionally, owning a home gives you the freedom to customize and make changes to the property to make it your own.
Costs Associated with Renting vs. Buying
When deciding whether to rent or buy, it’s important to consider the costs associated with each option. When renting, you typically pay a security deposit and monthly rent. When buying, you need to pay a down payment, closing costs, and monthly mortgage payments. However, it’s important to note that owning a home can also come with additional costs, such as property taxes, homeowner’s insurance, and maintenance and repair costs.
Current and Future Real Estate Trends in Chicago
While the current trend in the Chicago real estate market shows a slower rise in home prices and a tight inventory of homes for sale, the Mortgage Bankers Association predicts that interest rates will decrease in the coming year. This could make buying more affordable for some. It’s also worth considering the potential for future real estate trends in Chicago when making your decision. If you’re looking to buy, you may want to consider neighborhoods that are up-and-coming or are expected to see growth in the near future.
