Is it Better to Rent or Buy in Chicago?Chicagoland residents often wonder if it is better to rent or better to buy a home.  According to the latest information from Trulia, it still remains far cheaper to buy a home rather than rent one across most of the country, and certainly, overwhelmingly, in the city of Chicago.

Here are some compelling statistics that CNN provided on the matter.

The % that Chicago residents saved buying vs. renting: 47%

Median home price: 170,000

Median rent: $1,700

With a 47% savings percentage, Chicago is far and away a buyers market!.

On a national scale, Chicago rents are well above national levels.  They have climbed over 7% in the last 12 months alone.  This is particularly significant; an the national rent average has been steadily climbing as well:

30-Year Fixed Mortgage Rates Unchanged, but Still Expected to RiseA report from Zillow Blog this week confirmed that 30-year fixed mortgage rates remain unchanged from last week.  Borrowers are currently quoted at 4.18 percent - the same as last Tuesday.

However, we must note that the rate did hover to 4.22 percent for the majority of last week, while dropping to 4.07 on Sunday, ultimately arriving at 4.18 on Monday.

Erin Lantz, director of mortgages at Zillow, describes the immediate future of the mortgage rates:

"Rates were steady last week as uncertain economic data left markets with a fuzzy picture of the health of the economy. This week, we expect the uncertainty to continue, leaving rates fairly flat."

So, where does this put prospective buyers?

We recently talked about the Fed tapering their stimulus package in 2014, and how mortgage rates were anticipated to rise in response.  The trend is expected to continue in full force.

Here are the current mortgage rate projections from KCM blog:

Janet Yellen, the replacement for Ben Bernanke as Fed Chair, made it quite clear in her testimony for the Financial Services Committee recently, that she will continue to taper bond purchases at the currently established level.

“In December, the Committee judged that the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions warranted a modest reduction in the pace of purchases, from $45 billion to $40 billion per month of longer-term Treasury securities and from $40 billion to $35 billion per month of agency mortgage-backed securities. At its January meeting, the Committee decided to make additional reductions of the same magnitude. If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings."

What does this mean for buyers?

Home Sales At a 7 Year High - Now is the Time to BuySome fantastic news from the KCM blog was recently shared, indicating national American home sales have reached a 7 hear high as of the end of January.  The housing market appears well on the way to (if not already at the point of) stabilization.

13,945 houses are being sold every day, on average, according to the National Association of Realtor's recent Existing Home Sales Report.  Additionally, sales have increased 9.1% since 2012, and that this is the best performance the market has seen since 2006. 

This means that, despite rising interest rates, home sales are in a great place.  Now is a great time for first-time homebuyers to explore the market, or for existing homeowners to move up to a better home.

Interest rates, while rising, are still below 5% which keeps the doors open for many prospective homebuyers.  Homebuyers are encouraged to start now rather than later, as waiting to buy will, in fact, reduce potential purchasing power.  As the rates continue to increase as they are expected to, buyer's purchasing power will decrease, as this KCM graph indicates:

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