You’ve probably heard over and over again how it’s cheaper to own a Chicago home than to rent one…well, it’s still true! A new study by the Urban Institute examined the median cost of renting a 3-bedroom home in Chicago, versus the median cost of making a mortgage payment on the same type of property. Under their methodology, having a mortgage payment would save 5.6% more of your monthly income than renting!
This isn’t just another buy-a-home-bandwagon study. In fact, out of 33 major U.S. cities in the study, 16 of them found that renting was cheaper. Not so in Chicago! We’re one of the 17 cities where home ownership puts you dollars ahead on a monthly cash flow basis.
This is important to note, because most other buy-vs-own studies look at the long-term math, and figure out that home ownership basically puts you ahead after 5 years or so. After all, you’ve got a down payment and closing costs, and it takes time to make that money back. (Of course, you also have home value appreciation and you avoid the inevitable rent increases.)
But the idea that your monthly mortgage payment could actually be cheaper than your monthly rent – all other pros and cons aside – doesn’t get discussed as much. Yet with the low mortgage interest rates we still have today, this is entirely possible to accomplish. It all comes down to your personal financial situation, and how your living situation now compares to what your money buys on the market. We can refer you to trustworthy, local lenders who will help you crunch the numbers!
StartingPoint Realty – dedicated to first-time Chicago home buyers!
Need personal assistance? Make an appointment to meet us at our Chicago Resource Center for information without any sales pressure. 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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