It's important for first time buyers to take a step back and look at the market in a broader sense; not what has happened in the past 5 years but rather the last 10 or even 20. Doing so will help to solidify why it is still such a great time to take the plunge into home ownership.
Ones budget heavily relies on a homes purchase price and mortgage interest rate. With current rates still hovering around 4.5% it is still 47% cheaper to buy then rent in Chicago. What about the recent appreciation in prices? Across the city many neighborhoods saw home prices hitting double-digit increases year over year. Although this has impacted affordability, it has only done so marginally. To put things into perspective it was 50% cheaper to own then rent in Chicago last year.
How much would interest rates need to jump before before renting trumps buying? In Chicago they would need to increase by a whopping 150% (or just under 7% interest). This may seem high for Millenials but in 2000 interest rates averaged 8% and in 1990 over 10%.
Of course all this irrelevant unless you plan to stay put for a while, save for a good amount down, and properly itemize your federal tax deductions. Buying isn't for everyone but with the current market conditions a unique opportunity exisits, one that wont last forever.
Whether you are looking to buy or rent, expert representation is a must. Contact me to set up a consultation today.