Skyrocketing home prices have made things tough on first-time home buyers around the country. According to a recent report by ATTOM Data Solutions, median home prices exceed the reach of average wages in about 68% of U.S. counties. The study compared median home sales prices against average wages in 446 U.S. counties, factoring in details like a 3% down payment, and a front-end debt-to-income ratio of 28%.
Using these metrics, Cook County and the Chicago area offers one of the better home buying opportunities in the nation. This is because our median home sale price of $216,500 is in reach of the average annual household wage of $72,657.
Another study, conducted by SmartAsset, also pegged Chicago as an affordable place to buy a home, based on an annual household income of $48,384, and a median home price of $243,900. But this calculation assumes that the home buyers have no other debts, and could manage a 20% down payment. It also assumes a 4% interest rate, which is lower than what the market is currently trending.
In both studies, the basic results are the same, saying that our local incomes are in line with median home prices. The problem is that affordable home inventory is very lean. While Chicago may have a statistical median home price under $250,000, we don’t have a pile of homes for sale in this price range.
Plus, there are many factors involved in how much home you can personally afford, including your credit score, outstanding debt, down payment amount, gross income, mortgage interest rate, property taxes, insurance premium, and so on.
The best way to find out how much home you can afford, is to attend one of our free, first-time homebuyer seminars, and then talk to a local mortgage lender. A good home-buying education is your best advantage in the market!
StartingPoint Realty – serving first-time home buyers!
StartingPoint Realty proudly serves first-time home buyers throughout Chicago and the Northwest suburbs. We provide complete education and guidance during the entire home buying process! Attend a free home buying seminar to begin your path to home ownership!
We provide great resources to help you become a successful home buyer! Check out our list of home buyer assistance programs on our website!
Always feel welcome to contact us for help with your Chicago home buying questions!
Ryan Gable Broker/CEO Starting Point Realty
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