Jan
06

Owning Beats Renting in Chicago

January 06, 2013

chicago real estate pricesHome prices may have risen in 2012, but buying a home is still a better choice than renting in the New Year!

The current cost of renting in Chicago is about 31 percent higher than the current monthly mortgage, according to Deutsche Bank A.G. Before the housing bubble burst in 2006, the cost of renting equaled about 58.5 percent the cost of owning. After the recession, landlords began increasing their rental rates as more homeowners defaulted on their mortgages.

However, high rental rates may no longer be the norm in 2013, since 4,700 new apartments are expected to be built in downtown Chicago over the next two years. More competition means it will be harder for these landlords to justify high-rate pricing.

If  buying is such a smart option, why are many people still renting? Even though home prices and interest rates are at an all-time low, some Chicagoans are still nervous about taking the plunge into homeownership. Due to the recession and unemployment, many renters who wish to own a home are struggling to put away money for a down payment. Also, even though mortgage rates are low, banks are  adhering to tighter lending standards than in prior years. However, those with good credit and stable employment histories may find that they qualify for low down payment programs like those offered by both FHA and VA.  Potential buyers should check with a reputable mortgage lender to see what options may be available.

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Jessica Thom

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