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If you've been dreaming of buying a home in Chicago, don't let the recent rise in mortgage interest rates derail your plans. While rates are higher now than they were a year or two ago, there are still many compelling reasons to move forward with a home purchase in the Windy City.
The key for prospective buyers is to focus on the big-picture benefits of homeownership rather than getting caught up in interest rate fluctuations. Interest rates may be volatile, but whether or not you achieve the dream of owning your own home is still within your control. Here are four key reasons why buying a house in Chicago can still make sense, even with today's higher mortgage rates.
Rent Prices Are Also Increasing
While higher interest rates impact affordability for buyers, rent prices have also been surging across Chicago in recent years. As of September 2023, the median rent for a one-bedroom apartment in Chicago had increased 24% from the previous year; and rent for two-bedroom apartments had skyrocketed 30% in the same time frame! Clearly, buying a home now and locking in monthly mortgage payments could provide long-term savings vs. renting. Owning provides stability and predictability for housing costs that rising rents erode.
Owning Provides Tax Savings and Stability
In addition to the stability that comes with fixed-rate mortgage payments and no fears of rising rents or eviction, owning a home provides a variety of tax benefits that aren't available when renting – from mortgage interest deductions to property tax breaks. Think long-term and recognize the decades' worth of housing cost stability you can lock in now!
Owning Builds Equity Over Time
Perhaps one of the biggest financial benefits of homeownership is the ability to build equity. As you pay down your mortgage each month, you accumulate equity that you can tap into later via options like home equity loans or lines of credit. Even if rates are high now, you can refinance down the road when they fall again. In the meantime, you'll build equity that renters miss out on.
Homeownership Provides Critical Stability for Growing Families
For those looking to start or expand their family, owning a permanent Chicago home provides multiple significant advantages over renting. Children thrive on stability, and bouncing between rented apartments or houses every year can be extremely disruptive to their development. Owning provides the ability to customize your home to your family's needs and stay rooted in a community where children can attend the same schools year after year and build lifelong friendships. Even though buying a home is a major financial commitment, it provides growing families with long-term housing stability that is priceless when raising children.
The Bottom Line
Don't let short-term rate fluctuations jeopardize your long-term plans and goals! Owning a home in Chicago provides cost stability, tax savings, and many other benefits for years to come. The challenges of current high interest rates shouldn't derail your dreams of becoming Chicago’s next new homeowner! Work with a knowledgeable mortgage loan officer, exercise patience and perseverance, and your dream will become a reality!