Buying your first home in Chicago or the Northwest suburbs has always required fortitude! Already, 2018 is shaping up to be another competitive year. Here are the 3 main challenges facing home buyers, and what you can do about them!
Low home inventory. As reported in Crain’s, Chicago home inventory was at an 11-year low as of February 3, 2018. In the suburbs, home inventory is especially low in Buffalo Grove, Schaumburg, Vernon Hills, Bolingbrook and Carol Stream. Overall, home inventory isn’t expected to be much better than it was in 2017.
But as we said in the Crain’s article, half of winning is staying in the game! For example, we had some clients who lost out in a bidding war for a particular home. Instead of completely giving up, we stayed in contact with the selling agent. When the “winning” deal fell through, the selling agent called us back and asked for a fresh offer. The seller accepted it, and our clients got the home after all!
We also ask mortgage lenders to vouch for our clients. A quick phone call from the lender to the listing agent can add more clout to that pre-approval letter!
When it comes to the home search, our knowledge of Chicago and the Northwest suburbs helps buyers find opportunities that they probably wouldn’t have found on their own. The market moves fast. If you’re looking at homes online through a consumer portal, it’s never going to be as accurate as the kind of search a licensed agent can conduct. Let us help!
Rising mortgage interest rates. As of March 1, 2018, the average mortgage interest rate on a fixed-rate, 30-year loan was 4.43% with 0.5 points, according to Freddie Mac. Mortgage rates have now climbed higher week-over-week for 8 weeks in a row. But keep it in perspective! 10 years ago, the average rate on the same type of mortgage was 4.97%, and for the times, it was a bargain.
You can assure yourself of obtaining the best possible mortgage rate, by having your credit standing in the best possible shape. This means a good job history, a strong credit score, and as much of a down payment as you can reasonably afford. Be sure that your consumer debt is minimal, too! Your debt-to-income ratio – and your home buying power – is affected by the total debt you carry.
Rising home prices. Yes, home prices have been rising, but here’s the thing: every local market is different. Your home buying dollar will go farther in some communities than others.
You may have to ultimately decide what means the most to you. For example, a single-family home in Palatine might be getting too expensive, but your budget might swing a townhome there. Be willing to look at homes that are in good locations, but need a little work. Cast your net wider. You might be surprised by what your money gets in the next ZIP code!
Most of all – be patient! Home buying is more of a marathon than a sprint. Avoid getting in over your head. If your home buying journey takes a little longer, that’s OK! Buy smart, and you’ll never regret it.
StartingPoint Realty – the solution for 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
Become a StartingPoint Realty Facebook Fan
Follow StartingPoint Realty on Twitter