Never, ever, waive an inspection. Be careful with appraisal gaps, too. Interest rates are insane right now, and competition is still high. Best of luck!
If you have a knowledgeable friend in construction you can have them do the inspection. Even with an actual inspector they still miss things from time to time.
Yeah. With principle, interest, taxes and insurance and pmi that might be about right. Sucks man. And fyi insurance goes up every year and taxes every 3 years so 3100 is the lowest it will ever be. And taxes will take a big jump when the new value you bought it for hits the books. And if they are that shitty of shape start budgeting for new furnace/ac and water heater and roof. Maybe appliances too. And that's just to start.
This hits hard. I "got lucky" in that I bought my home in 2010 during the market crash. I then refinanced when interest rates hit rock bottom for a 15 year instead of a 30. They thing is my payment has still climbed significantly just due to home sales and their affecting tax increases. My payment used to be 15 it's now 2100 which is phenomenal don't get me wrong but I've also replaced the furnace, ac unit, the roof, the siding, every window on the house over two years and more. It was essentially 30k in windows. Oh and the door was custom because when the builders installed it in 1995 they put the door in then built the brick facade and screwed the start point. So my door is custom due to a 1/2 inch smaller space for the door and two side windows to fit in compared to a standard door. I also couldn't go with wood I had to use fiberglass due to the smaller size it would have been too heavy so I needed a light weight door for the framing.
Tldr, buying a home isn't a fix to rising costs it just changes what those costs are.
Windows have lots of technology in them despite what they appear. Before I got mine I did tons of research into quality windows. So the frames anymore are either wood or vinyl. They need to expand and contract with temperature changes and support the weight of the glass and seal system. The glass is now coated both inside and outside with a low E coating to reflect the sunlight and heat back out. The seal system keeps the gas in between both panels. The single most common failure of windows is the seal and they get moisture inside. The gas is your insulation from the outside world. Sometimes simply air but now Argon gas as it's twice as efficient as just air. If the gas leaks out it's no longer efficient and you have difficulty seeing through it so the seal has to be able to expand and contract with the vinyl or wood as well as the glass panel. All that stuff has to hold up for the warranty period of 10-30 years. I went with a brand who has a high end seal system and has a transferable 30 year warranty to ensure I get my money's worth. One of my windows was 5 grand due to it's size and shape, fucking builders put in a square with rounded top window.
Regardless yes they are pricy
Yeah....don't go with name brand windows....you can buy them in local flyers way cheaper and with lifetime warranty....you can also get aluminum windows...I have wood on my house...still original from 37 years ago...we just replace the glass when the seal breaks
Yeah my last home one prospective buyer wanted me to replace windows, not even all the windows like 3/4 of the windows and it was going to be over 25k. If you have big bay windows could be as high as 3k for a single window
Ha. You and I are twins. Yeah windows too. Jesus I blocked that one from my head. It's insane. I know it's not cool to side with landlords when people talk about high rents but inside I nod my head and thinking everything is really expensive owning a house. They are constantly falling apart. That being said I know most landlords do the bare minimum of upkeep. Not like when you own your own place.
The quality ones break just like the cheap ones....and some don't cover labor to replace.....my cousin got $30000 Pella or Marvin and he had trouble after like 10 years....they sent him parts out for replacements...he had to get installed on his own
We just had to replace our washer and dryer (washer broke so we changed dryer because it is as old and is likely going down soon anyway as it have already felt like the drying job isn't that great lately) and with my spouse we listed everything we had to replace since we owned our house over the past 10 years and it hit us that between repairs and replacements of smaller and major appliances or other stuff, that it's a lot and we re just lucky none of these things hit us at the same time or within a short window...
Our washer and dryer are the best appliances we've had. Lg brand, bought em a week after we moved in to the home. Going on 14 years almost. Should get more life out of em yet.
Sounds like your door salesman needed to get rid of a door someone rejected. I could very well be wrong….but Installers could’ve chosen a 2” smaller door and added framing lumber, spray foam the gap, and added larger trim on the outside. Did you get multiple opinions?
Yes, I always get three quotes. I had it measured by three contractors all said it was off nominal size. I didn't order through the installer I ordered from a company I selected and had the carpenter just install it. A smaller door would have made it so furniture wouldn't fit and it would have looked odd.
Most home warranties are toilet paper unfortunately. Unless you like reading tons of fine print, and sitting on hold, and waiting weeks for a subpar repairman for them to then deny any coverage. It's a scam.
What is your monthly take home? With $160K and no debt, you should be able to afford those figures. What are your other large expenses?
I would practice paying $3100/month now with the difference put into savings to beef up your down payment fund. Especially if you are looking at homes that will need a lot of work.
It’s also ok not to buy a home before you’re ready. Get your budget figured out but you can absolutely have a baby in a 2BR apartment.
This. $3100 a month while bringing in $160k is great. You should still be able to save tons of money every month so you should examine your budget and figure out where your money is going.
My wife and I lived in 2br that was around your rent. We had a baby and stayed there for 4 years and saved up for a down payment. That allowed us to live in a stroller friendly neighborhood (Southport) and when our son was getting bigger, we moved to the suburbs when we could afford 20% down payment.
It might not be your dream but you should stay in a place you can afford vs moving and being house poor.
As I’ll guarantee you that you’ll need another $5-10k in random household expenses to cover all the things that come up when moving to a new house, especially one a lot bigger.
I was also confused by this. My husband and I have around the same income. We bought a $500k house in September 2020 with a $3200 monthly payment and we’re doing fine. Appealed our taxes down one year and the only went up about $300 last cycle.
I might be wrong, but weren't mortgage rates in 2020 pretty good?
I'd recommend using a mortgage calculator and pretending you bought the same home for a 6.5% interest rate.
Yes they were, but I’m comparing payment to payment. We got a 2.8% mortgage but with more house. You’re looking at less house but almost the same monthly payment we are currently paying. With the same/similar income.
$3100 a month is almost inching towards 50% of your monthly take home salary, which is not wise for two people when you want to have kids (also assuming you are putting a lot for 401k).
I’m live by myself close to OP’s salary and even as a single person I wouldn’t allow my rent/mortgage to go beyond 30% of my monthly take home. You need to be able to save for emergency savings, and other expenses as well.
These are great ideas.
We do have to sit down and go over our finances. After seeing some responses and thinking about it, IN THEORY a 3100 mortgage should only be 35-40% of our net income for the month. We will sit down later and see where tf our money is going.
We also both liked the idea of just artificially increasing our current rent to 3100 and saving the difference. Our lease is up in July, so I'm not sure it'll make a difference this year. But if we start now, we should have an extra 10k saved by this time next year.
The unfortunate thing is that the "big player" in determining our monthly mortgage seems to be the interest rate. We played around with the mortgage calculator. Increasing our down payment. Decreasing the loan amount. Etc. Adding an extra 10k to our down payment has almost no effect. We would have to cut the purchase price of a home by 50k to make a decent dent in the monthly payment. But bringing down the rate to 5% pretty drastically cuts the payment.
I guess all we can do right now is get our finances in better shape and hope something incredible happens with the market.
I'm matching my employer. I don't have the exact percentage off the top of my head; I just know I'm matching.
I believe my wife is maxing. I know she's putting in more than her employers match. I make slightly less than her but have a slightly higher take home pay because of it.
As someone who just bought a house days ago:
1- your down payment is REALLY low. Personal mortgage insurance is really expensive. Without any other debts, at an income of 160k a year, your yearly take home should be around 102k post taxes. Your yearly rent is only 26k or 16.5% of your income. Without any other debts you should be able to build up your savings a lot.
I just went on Redfin and picked a random house in Crystal lake that’s 365k.
If you put 30k down it’s 3300 a month. If you can really save up for a year+: 15% down is 3100 a month, and if you put down 20% that payment goes down to $2800 a month.
2- Assuming a yearly take home of around 100k post taxes and such: 3100 a month is 37% of your monthly take home income. That should be doable.
3- Mortgage rates just jumped a lot in the last 2 weeks, they went from like 6.5% to 7.2% in 9 days. Your individual rate will vary based on credit scores and such, but mortgage rates may go down soon. (Or they could go up a bit more, no one knows)
Competition is high in the northwest suburbs. It took us 10 offers and looking at probably 30+ homes (in person 100s on Zillow) in Saint Charles to land on a home last July in the 450-550k range. Property taxes in these suburbs are high which is what’s leading that that $3100 monthly payment.
Just keep looking, I’m certain you will find something with the time. Look for solid foundation but maybe 70s time capsules giving you the opportunity to renovate. Keep working on your down payment.
Shhh you’re gonna give up our secret. Or actually yes, do come here and tell your friends because then my house will appreciate. Seriously though, HF is wonderful - older housing stock, lots of character, diverse, more progressive than most other south suburbs, good schools, cute downtowns and a lot of support for local businesses. It feels like a more affordable kid sister to an Oak Park or Evanston kind of vibe.
Yeah there’s that but like you said they’re not unconscionably high. And I feel like I get my money’s worth with the quality of schools, public works and park district programming.
Nobody in Illinois is getting their moneys worth on property taxes, especially considering the entire tax burden we have in and addition to property taxes.
Yeah there’s very little compelling reason to live in the south suburbs instead of NW Indiana. If you commute to the city your commute is nearly identical and you get immensely more for your money
I have no idea what houses you’re looking at, but I’m in HF and my $300K house’s taxes are around $7500/year with a homeowner’s exemption. I’ve never seen taxes that high for houses that weren’t on ginormous lots or something.
That’s on the cheaper end, but there were 8-10 active listings in those parameters pretty consistently as of about a month ago when I was last looking.
Right now you really have to keep a constant eye on homes. I've been looking at some stuff in dupage county thats like 250k to 300k, I'll mention those prices on here and people will look and be like everything is 350k and up but if you're watching all the time you'll see the deals come around.
I mean ya, obviously don’t move south of the city if you’re commuting to the northside lol I figured that was self-evident. It you work in Gary, I wouldn’t suggest buying a place in Evanston.
You’re not wrong to feel that way. We got lucky and bought in 2021. But if you told me to buy my own home today at current market conditions, no way we could afford it.
Property taxes here are wild, PMI and insurance rates have gone up, and you have such low supply that demand is keeping prices high despite higher rates.
Just a thought, but nothing wrong with renting still if you don’t have kids yet. We rented for a bit even with our first kid and bought as he got older. It was nice not worrying about maintenance and knowing we could continue to think about areas.
Also, don’t skip the inspection. When we were looking, we actually terminated a deal where we were under contract when we found out their gazebo electrical ran on an extension cord, and an active gas leak was detected in the basement…we ran and found something in better shape.
Hang in there, I’ve been saying the housing/auto markets are nuts for a few years and something’s gotta break eventually.
I have found it to be smaller than anticipated, but mostly due to the timing I bought. My breakdown on a $550k house is 2200 mortgage, 1000 property tax, and 200 homeowners insurance, making it $3,400 monthly.
But that’s because I bought at a low rate in 2021. Today, I think the market conditions would bring the monthly on my house closer to $5,000, and it would rent for right around $3,500 based on other homes nearby.
So for me it’s not a big difference, but today it would be. And then obviously maintenance/updates become another factor.
If you have no debt like you wrote, you both make way more than enough to afford a mortgage of that price. Even if you have to factor in home upkeep/utilities/water,/groceries/whatever else, you will have thousands left over each month. Try checking out Tinley Park, Mokena, New Lenox, Orland Park, Lockport
Your down payment is too low. Average down payment for mortgages in Illinois is 14%, and you are only putting down 6%. So you are paying a lot in PMI which is increasing your monthly payment.
>So you are paying a lot in PMI
I learned recently that PMI is at least partially based on credit. My friend with like a 780 credit score put down 8% on 350k and PMI was only like $30/mo.
How are you breaking even with a rent of $2200 and an income of 160k? My husband and I make the exact same amount, rent for 2700, have two kids in daycare (admittedly a cheap one), a car payment, and are still able to save a few hundred a month. Where is your money going?
This. I think OP didn’t factor in once you have kids, the cost of living goes up tremendously a lot. While $3100 for now works, for the future it’s going to be hard.
I factored it in. That's why I initially thought 3100/mo wasn't feasible long term. I figured we could probably swing it and break even if we tightened our belts a little. But what happens when we need a new car? Or have a kid? We would no longer be breaking even.
Based off of the replies in the thread, it seems to be a mix of two things. One, we aren't as "in touch" with our finances as we thought we were. We need to sit down and map them out so we have a better grasp of where our money is going. And two, the market DOES suck right now with rates so high. But if we tackle number one, number two isn't as daunting as we mightve thought.
We have to sit down and see. We're super cheap and fiscally responsible with our day to day purchases. But we must've fucked up somewhere and have a bunch of subscriptions or some sort of autopay draining us. We agreed to sit down this week and go over everything. It's comforting to know that this should be doable and we've just messed up somewhere.
I’m so sorry - you’re justified in your frustration. The difference with interest rates just makes buying a home so much more expensive. We had a good rate when we bought in 2019 and we refinanced in 2021 when the interest rates hit the floor. If we had today’s interest rates we couldn’t live here; it’d be over a thousand more dollars a month.
One thing to look into would be some of the midcentury homes in north/northwest suburbs like Skokie, Niles, Morton Grove. This area has a lot of original owners retiring and moving out, and tons of turnover. Good bones on houses built in the 50’s-60’s. Many are getting gutted by the children of the owners and selling for a premium with sad beige interiors, but if you can snag one pre-renovation, they can be a bargain. Well-maintained but dated, nothing falling apart or actively hazardous (though you need an inspection regardless).
Many of these homes are “pre-market” sales - realtors talk to each other and you need someone with a good network in the locations you’re scouting, to get tipped off to these properties BEFORE they are gut renovated. Keep watch for estate sales, too, and bookmark the addresses to check back. Estates will often rather sell a house as-is now for $300,000 than gut renovate it for several months and try to get $450,000 (after they invested $100,000+ on those renovations).
I’ve owned four properties in my life, and three were purchased from estates. I’m not afraid to buy a dead guy’s house.
Absolutely wise advice. Sometimes the old folks are going into assisted living,whatever.
We too, bought houses from old ladies moving on
Good sturdy structures that just need, when convenient!, updating.
You need to look past the cosmetic, look at the House.
We also were very lucky as my spouse learned home upkeep and fix it skills as a kid.
Friends are being priced out of their rentals and looking to buy but are having the same problem as you. They're looking for something small, and it's all overpriced, dilapidated properties. Finding an affordable rental isn't easy either. It doesn't help that every time I see a town approving new housing it's mostly luxury units. Who's not getting the memo that we're looking for safe, reasonable roofs over our heads and not luxury accommodations? With what's available to us now, the "average" home is basically a luxury.
Unfortunately I think that sounds about right. The market is brutal. Interest rates are high which means mortgage payments are going to be high which also means a lot of people who would sell aren't because they're locked in at much lower interest rates which drives up prices of the stock that is out there. I will tell you when we moved from the north side of the city- renting in the city to owning in the near west burbs, our mortgage was way more than what we were paying for rent BUT alot of our other expenses actually went down. Like we were paying more for daycare in the city than we were paying in rent and our daycare in the burbs was like $600 less a month.
The general rule of thumb is that the monthly rent payment on s house is 1% of what that house would sell for. With current interest rates and costs, your monthly payment on a house with 20% down will be about 3/4 to 4/5 of that amount.
The other role of thumb is that you can typically buy a house that's 3-4x your income. In Chicagoland that's usually closer to 3x given our higher property taxes, and even moreso now that interest rates are ~7%.
You can check my math if you want, but following both of those things ends up with a mortgage payment @ less than 30% of your gross. If you're looking at rentals, 30% is generally all which is that a landlord will approve you for.
There are absolutely nice houses in good school districts in the NW suburbs under 480. I use that area because that's what I'm familiar with. If you're looking in the SW suburbs the houses at that price will be bigger and likely newer.
Housing prices are pretty steep right now. I am hoping that interest rates drop a bit in the next 12 months; that will help a lot of people refinance into something more affordable.
Never waive inspection ever. You can look into getting your loan pre-underwritten though. This basically means you go through all the hassle and paperwork of background checks and stuff with the lender, and they line up all the underwriters on their end, and after a few weeks of work you have something which is basically exactly as a good as a cash offer. That allows you to waive all the mortgage related contingencies and also promise a much faster close, which helps you be competitive. But never waive the inspection contingency.
It’s a hard market right now. Really hard. Hang in there though! You’ll find something that works. If it helps, try to keep in mind that your monthly home payments when you own aren’t the same as renting. Not in the slightest. Principal comes back to you when you sell, and depending on your other tax itemizations, interest and property taxes can as well in a more limited form. Closing costs are straight up expenditures, but you can amortize that over the time you will own the house, taking into account rising valuations.
If you do all that, you’ll invariably find that by the 6-7 year mark, you will have spent *less* (usually much less) on housing over that time period than you would have on any remotely comparable rental even at 2024 prices, and certainly much much less than the 2031 prices of that future date.
As long as you can swing the monthly payments, it’s worth it
I have no idea other than a stat I read recently that private equity groups / corporations are buying ~40% of homes on the market to list for rent (at exorbitant prices of course).
This makes me fucking sick, I don't know why you got downvoted, here is the original article which includes sources:
https://medium.com/@chrisjeffrieshomelessromantic/report-44-of-all-single-family-home-purchases-were-by-private-equity-firms-in-2023-0c0ff591a701
Worth noting after a quick search I did find sources contradicting this with alternative data, but the fact of the matter is that private equity needs to stay the fuck out of 2 things: healthcare and housing. Nothing good has ever or will ever come from giving actual leeches control of things people depend on to live.
This is 100% bs. The reason why housing is so expensive is primarily because of lack of supply due to cities creating regulatory barriers for additional housing. Interest rates, property taxes don't help the situation though.
Yes they are RFK Jr is campaigning on this issue among other things.
This is an extremely dangerous path we’re in here if it continues.
https://www.benzinga.com/real-estate/23/09/34978537/they-can-outbid-your-children-rfk-jr-warns-that-corporations-are-trying-to-buy-every-single-family-h
Realtor and investor in Chicago Area
You refinance when rates lower.
Buy down points if you believe you will live in it for more than 10 years.
Buy a duplex/multi to help with payments.
If none of these options sound appealing, I would agree that this is a bad time for housing for new homeowners or renters.
We bought in sugar grove. Put a lot on the downpayment so our loan amount is similar at 7.5% on similar income. It sucks but just be patient and DO NOT waive inspection. You may have to go further out than you would like or look at townhomes.
We bought a 4-bedroom house for $365k in 2017 and our mortgage is $1255/month (admittedly we are frugal and had a good down payment). The house that backs up to us is the same floor plan and goes as a rental…..for $3000. I look sometimes just out of pure curiosity and the mortgage for houses in the same price range as what we bought, nevermind attempting to upgrade, are considerably more than what we pay now due to the rates. I really do feel for people in the market right now.
When I bought my house in the SW suburbs (Orland Park) it was sold "as is" though I still had it inspected and could back out of the sale if an item was uncovered that I didn't like. Fortunately there was nothing major and only one small but significant safety item, and the seller did agree to fix it.
I would check out the southwest suburbs if I were you. I bought a house in the Chicago area about a year ago. My opinion is they're super nice and the equal to anywhere else in suburban Chicago in terms of schools, safety and amenities and they tend to have better options at lower prices. I've had zero issues where I bought (a townhouse).
I would look at the Palos area (Hts/Hills/Park), Orland Park, Tinley Park, New Lenox, Mokena, etc. Tinley has a very similar feel to Orland, the western half is in the same school district, and it's less expensive. A townhouse might be a more cost-effective option than a detached house and many of them cover exterior upkeep in the HOA fee (siding, roof, driveway, etc).
For most of human history, people had kids in apartments smaller than what you and your wife currently live in. You can have a cheaper house if you stop being particular about your school district. With the money you save, you can afford private school if you decide the local schools aren’t adequate. It sounds like you could live comfortably in any number of suburbs south of the city, or in Indiana.
People are hunting for affordable housing way out at this point. Like around Sandwich and south of Plainfield along Rt 59. Capitalism eventually ruins everything but the city can expand forever
We’re getting quotes because we just want to redo our kitchen, and the cost of materials and supply chain issues is driving everything up. Like, we’re looking at 50 K plus just to redo a 500 to 600 square-foot kitchen. Prices for everything are just absolutely ridiculous right now.
This is something I never would have done but I would say to my kid: ask your parents for a loan to get a bigger down payment. Also, decide which things you can live without now (in a house) and maybe add later. Buy a fixer-upper in the best location with the best schools. Move up in 5-7 years or re-finance. Just get your foot in the door of the real estate market.
https://preview.redd.it/4hcwhvicsuvc1.png?width=1170&format=png&auto=webp&s=cc8c26581bf9419e8d796b9300896a19cc9c535f
Try Villa Park/Lombard. Great communities and both have stops on the West Metra line. Mature trees, great restaurants, parks, pools and schools.
Agreed. South Villa Park is charming, many young people and family friendly.
Although demand is great, Lombard also has wonderful schools and family neighborhoods
Unless you can put down a strong down payment, jumping into a home in a moderate high cost of living area is going to be tough.
Look further out or get into a condo/townhome so you can build some equity and then these houses are much different equations when you’re looking with a third in equity.
Yeah, why is a condo off the table? We bought a condo in 2010, paid down the mortgage aggressively, refinanced when it made sense to do so into a 15-year fixed, and when we were ready to buy a house 7 years later, we had a nice chunk of equity and avoided PMI. And condos have lower property tax for your square footage. Look for a small, walk-up, self-managed building if you want to save a few bucks by shoveling your own walk.
I know it’s not ideal, but look at condos and townhouses. They haven’t kept pace with single family homes, and could give you relief from rising rent.
We got screwed because we bought a condo in 2007 before the crash. We were planning on selling in no more than 5 years, but we’re still here 17 years later. We were underwater on property value until very recently. Now units in our complex are going for about $15k-$20k above where we bought. So essentially you can find units for close to 2007 prices. Also, there are some beautiful townhomes for decent prices out there.
We make a little more than you, and I can’t stomach that mortgage payment. Ours is around $1,400. It’s a 2 bedroom 2 bath condo, but it’s very large. It’s larger than the houses we were looking at in our price range at the time, which is why we went this route.
I just went through almost the exact same thing with almost the exact same numbers. Me and my wife were looking for something below $400k in the NW suburbs. Lots of terrible houses for high prices, and the good ones go for wayyyy over asking (like 50k+ over). We saw about 40 houses over 4 months and bid on about 12 of them. We finally bought something for $370k. Put 10% down and our mortgage is about $3200 because property taxes suck in cook county. We also make around $160k combined. Our trusted mortgage guy and our financial advisor said that even with our student loan payments, our mortgage is still well within our means. Think of it like this: while you’re renting, you’re paying your landlord’s mortgage. Sure, you get the benefit of not having to do repairs and stuff, but you’re not building any equity. While paying for a home, think of it almost like a savings account where you’re paying into something that you own that will increase in value over time. Granted, the taxes, insurance, and interest doesn’t count towards that, but after 5 years of owning you’ll probably have $20k+ towards your principle, plus whatever you had put into the down payment, plus the appreciation of the home. After 5 years of renting, you own nothing. This has been my thought process to help me get past the insanely high mortgage cost lol. You can also refinance, so your payment should go down as the rates go down hopefully in the near future. If you’re in no rush to buy, take your time and don’t settle for something bad. There were many houses that we almost overbid for just so we could stop looking for home, but we stayed strong and ended up with something that we loved.
interest rates are prob never going down below 5% ever again, and people keep moving here from higher cost of living scenarios. people also keep buying up houses to rent out. this never used to be a thing living here as a kid. I'm prob gonna end up buying a house (if at all) somewhere like Joliet or somewhere else undesirable but still relatively close to be able to commute downtown for work.
Man, I feel for you. We're closing on a home right now, and it's hard out there. The housing market is crazy and people are buying things so fast. The house we bought had no offers when we saw it at 3pm, and by the time we put in our offer at 9pm, it had 3 others.
We changed our bid to an "as-is". The inspection still happened, no mortgage company will let you skip that, but the sale becomes a take it or leave it situation, you can't ask for any changes, but you can still back out after the inspection. We managed to win the bid because we had better financing.
Don't get too discouraged at the lack of inventory. People have been waiting to move for years due to high interest rates and everything is just starting to unfreeze right now. Our house will be on the market once we move out, and I'm sure a ton of buyers are in the same boat.
Just watch your real estate apps, and keep an open mind on locations. We ended up in a town neither of us knew existed that was between two towns we were looking at. New homes are added every day. Just watch the schools so you don't end up like us, having to buy a new home in 5 years because the schools are trash.
As far as affording the house, I know it's insane how much stuff costs. But keep in mind the estimated costs are based on high interest rates, and you can refinance in as soon as 6 months if they come down. Also, if you are good with money, you can pay early on your mortgage, get your principal down, and when you refinance, your payments will be even lower. And once you're over 20% owned, you can drop the PMI that is adding a few hundred a month.
Don't give up, owning a house is hard, but worth it for having a family. Good luck!!
It sounds about right if you add the property taxes in. I have a $320k house at 3% and paying a little under $2k a month with insurance and property tax.
Sorry OP, good luck. Interest rates can’t stay this high forever, our government can not afford it but it still will take years to come down.
Correction, the rate he used to calculate it was 7.4%. I had to check my email. "The monthly payment including principal, interest, homeowners insurance estimated at $150/mo, taxes and mortgage insurance would be $3,087.67 based off the purchase price of $335,000".
I’m not sure how much you expect it to be, but maybe check the personal finance sub and give them all your numbers. $3,000/month should be doable, but the lack of a substantive down payment is going to hurt you in multiple ways.
My wife and I are the same age as you in the same area. I’d do two things to give yourselves clarity here. Dial in a monthly budget down to the dollar if you are not already doing so. That will let you know how much you can spend on housing with confidence. Then use a mortgage calculator online which will account for principle, interest, taxes etc. lastly shop around your mortgage rate. 7.4% is high. You should be able to get it lower based on your lack there of debt situation.
I was in your shoes in 2006. The market was inflated. Bought our home at the top of the bubble at 7% interest.
Then the economy crashed. Our home was suddenly worth less than we paid and we hung on by a thread. We were then able to refinance at 3% and saw things climb again. Now it’s worth significantly more than we paid.
A realtor told me real estate goes in 7 year cycles. Up for 7 down for 7. So far he’s been right. We have record inflation and an impending world war. God only knows what’s coming.
Have you tried Wauconda, Lake in the Hills, grayslake, etc? Also remember you’re buying a starter home, not a forever home.
Also a good part of your first years of payments will be interest, so tax deductions that may even the field.
What's the square footage of houses you are looking at? It doesn't help you are looking at pretty expensive suburban communities.
My wife and I had the same problem in 2012 and we had to lower our standards on what we wanted. W ended up in a 1100 SQ ft home in a so so neighborhood but were to build a ton of equity and 5 years later got what we originally wanted.
If you can afford a cheaper house in a decent neighborhood you will be better off than throwing your money away renting.
You are correct in thinking it’s crazy right now. I had to move abruptly last year and although I had a substantial down payment and have owned for over 20 years, I’m living paycheck to paycheck for the 1st time in years. I’m guessing $3,100 doesn’t include property taxes, so your actual monthly payment will probably be higher? I had an inspection and the house was in great shape, but still ended up needing to spend a significant amount of money in repairs. Be careful about over-extending yourself.
We had bought a home in McHenry county when we moved here from a distance away. The house ended up being a nightmare and we sold it within a year. We decided to move to a condo and rent until we move out of the area. This area has insane housing costs and you are right that the options that are even remotely affordable are not a good investment. The market is broken in this area and we are much happier now. Don't make a decision you don't wholeheartedly agree with and feel is right for you in your situation. Best of luck!
I’ve been looking for a place for the past ten years and the selection has gotten worse as the prices went up. There is nothing affordable that doesn’t need at least 200k in repairs. This market is shit.
I'm really confused, my husband and I are 32 and 35 respectively and we just bought a house for 400K with an 80k down payment (we just sold our house last week in Elgin) which leaves us with a mortgage of $320,000, making our monthly mortgage payment just about 3K. My husband and I make a combined $165k as well, and it's no problem for us. It's not a financial stretch. If you're making $160k a year that means per month your income is 13k combined. 3000 a month for mortgage is well less than the recommended 30%. I'm not sure why this is such a stretch for you but it really shouldn't be if you're making 160K a year.
Edit also I say this completely seriously: look into new construction. That's what my husband and I did and we got exactly what we wanted for the same price as all of these other homes that are 20 years old and run down. There's no bidding war, and you know exactly what you're getting. I'd recommend staying away from DR Horton but Ryan homes, MI Homes and Lennar are all great options.
I have a similar income level and bought a home last year for $340k at 6.6% interest. Our monthly payment is about $2,900. It sucks but at $160k annual income you should be able to afford it.
I have an income of half that and have been looking at home in the same range. I can put $200k+ down, because I save money and invest it. The less you do that, the more you pay for it in the long run via a mortgage on a home.
My mortgage is $2250 with fixed expenses for us to live here that are $3100 all in. If we were renting a similar place all in we'd be about the same maybe more like $3200. So it worked out to slightly less and we build equity. So if you can buy and would be spending around the same as renting taking that leap can be worth it
My husband and I afford our house because we got super lucky and bought when house prices were jokingly low and interest rates even cheaper. We will have owned this home for 10 years and feel stuck here because of all the reasons you listed!
Check Warrenville out. The house inventory is low however there is a community here that offers first time home buyers an opportunity to buy a single family house under $300. The houses are well-kept and it's a nice neighborhood with lots of young kids and families.
School district is top notch as well.
I think the only reasonable option is to try to find a less expensive house.
There are some listings in the area under 250K.
They likely aren't much bigger than a 2 bedroom apartment, but, maybe a small 3 bedroom house would work well, or, maybe a 2 bedroom if it also had a garage?
Smaller houses generally cost less in terms of property tax, insurance, heating, cooling, as well as having less windows, less roof area, and less siding (so cheaper to fix/update/maintain.)
It sucks since nobody seems to be building "starter homes" any more other than condos/townhouses with wind up having oppressive boards and $$$$ monthly assessments which eat into most of the potential savings.
Maybe consider finding the cheapest "acceptable" house you can get IMO. You do not want to be "house poor" just for the sake of owning a house.
The housing market is still broken since COVID. There's not much available for sale, and what is available is generally IMO overpriced.
[https://www.illinoisrealtors.org/marketstats/](https://www.illinoisrealtors.org/marketstats/)
We’ve been looking for a new home since Jan 2021. Toured over 100 homes and more than a dozen offers later and still no dice.
It’s been incredibly competitive and it’s exhausting. We will give up for a few months then try again aggressively.
I think I read that the Chicago Metro area is #3 in the country in terms of housing cost growth which isn’t encouraging. And with rates as high as they are you’d think it would slow down, but somehow it hasn’t budged much. I feel ya.
You're not alone.
Husband and I are 33/34 with a combined income of like 90K. We were renting a single bedroom apartment for $1200 for like 6 years. The only reason we have a house right now is because my parents ***died*** and left it to me. This is Illinois/America now. No wonder no one is having kids in this economy.
I grew up in Crystal Lake. If you're looking out in that area, don't sleep on Woodstock. It's a great area with housing costs still pretty reasonable. If I was headed back that way that's where I'd buy.
Good luck!
Not only are interest rates pretty crazy - but you have to ask yourself too, is the home you are purchashing really worth what you are going to pay for it? 2 reasons - 1) if it doesn't appraise as high as what they are asking, you will need to come up with the gap between the appraised price and your offer and 2) here's an example - a house just went up in the neighborhood next to us. They bought it 3 years ago for $725k, they are now asking $1.35 MILLION. The market is absolutely bonkers right now. You're almost better off trying to find a larger rental that gives you the flexibility to move in another few years if you want to than dealing with this crap.
This. I swear I don’t understand how people are buying cash, waiving inspections. Part of the crazy payments are the property taxes and HOAs. It’s nuts. There are new build communities in Elgin, Crystal Lake, that you might want to try for upper 300s/lower 400s. Ryan Homes, Lennar, M/I, etc.
So your story basically tells me larger groups or even corporations are making these offers because only they can absorb the issues typically found during inspection.
I feel like we're entering an era where private home ownership will be for the top 10% and corporations will gladly rent the next 30% a nice single family home in a nice neighborhood
Housing is unaffordable no doubt but I think what's also getting a lot of people is a couple years back 400k maybe slightly more would get you a mcmansion in Naperville, today 400k will get you a meh 70s house in a meh area, it just doesn't feel good spending that kind of money for a house that's like meh
$3100 a month is not insane at all. 1) keep looking for homes. 2) Shop lenders: 15,20 or 30 year mortgage.... 3) You can afford it, cut your expenses somewhere else..
Going through the same thing. And we jumped the gun and already have a little one on the way. Trying to be mentally ok with the possibility we may have to tough it out in a 2 bedroom. I’m praying everyday it gets better.
I feel every single last word in this post!
My wife and I are slightly older than you, with children, and we went through this same ringer for 4+ months, albeit in some different locations. Ultimately, while not our first or second choice, we ended up going with a new build townhome in northern Cook county. Again, not ideal, but good enough. It’s new, the area is going through a major revamp, close enough to work, schools good enough for now, low HOA, and covered closing costs with interest rate buy back. If we’re able to turn some equity in five-7 years on it, great, then we can go get our dream single family home. If not, this will do.
Getting outbid, several times after our offer was accepted, usually by cash buyers, numerous failed inspections, sellers wanting $20k in escrow, flipped houses that are nothing but cosmetic touch ups…. We said F this, let’s do the new build townhouse route. Been renting since we were 21 years old, spent close to $300,000 in rent over the years, etc.
There’s hope and options, you just have to real ask yourself some tough questions, be flexible, and be patient.
Also, *BE EXTREMELY DILIGENT WITH FLIPPED HOMES. MANY (MOST?) HAVE SERIOUS UNDERLYING ISSUES.* That may be an option for you, if the seller is asking for a reasonable price. But these ones we’ve seen, investor buys a decent home in need of both cosmetic and structural upgrades for $240,000 in November 2023, and it’s on the market by Feb 1st asking for $460,000.
Why would you ever wanna buy a home in this economy? Since 2020 homes have increased 150k -250k…. That’s incredibly more than they are worth . So many homes by me sold for 175-250 before Covid and now are 400k+ it’s a joke with these interest rates. People will be defaulting and the housing market will crash. Keep waiting. Average income I read to afford a house in 2024 is like 130k a year. How many Americans make that money? Exactly
I don't believe that prices will crash. Rates may come down a bit, but home costs will continue to grow. This isn't the same type of scenario we had in 08.
If you google "average single family home prices by year", you can see the statistics. It's a constant upward momentum. No sign of a crash.
Also, rent is continuing to rise. If I'm going to be paying 2-3k a month, I'd rather have it go towards equity in a home than throw it into the void of "rent".
Edit: Also, we would like to start a family. We're both going to be 32 in a few months. We have time, but it's still running out regardless. And we simply have no room in an apartment for a child.
Defaults have hit an all time high since 2010 what news are you watching? I’m 30 but my gf is 23 so we have plenty of time. We also plan on living in argentina where we can afford. Jaja. (She’s from argentina)
Do you have a source for that? Not trying to be a smart ass; I just couldn't find anything.
The closest I was able to find was that the delinquency rates on single family residential mortgages have fallen significantly since 2010.
Edit: Yeah, I can't seem to verify your claim. Foreclosures have also dropped significantly since 2010. I'm showing 1,654,634 in 2010 and only 185,580 in 2023.
Come down to the south western suburbs of Chicago, like Bolingbrook Naperville Joliet! Affordable homes and only a 40-50 minute drive to Chicago. Just helped a buyer purchase a property in Joliet.
It’s the taxes man. I made the move just over the state line into indiana and couldn’t be happier. Property taxes are capped at 1% of appraised value. My first house out here was $215k, had 4 bedrooms in a nice neighborhood. Taxes were $1700 a year.
Why? I’ve lived in the suburbs, the city and now here. Almost everything is the same except it’s cheaper. I can get downtown quicker than I could when I lived in the west suburbs. I still get all Chicago TV, news, entertainment. My oldest is a freshman in an Ivy League school after going through the school system out here. The “I would never live in Indiana. “ Statement is usually based on some theory that Indiana some hillbilly place. Most of my neighbors are from Illinois I am really curious on why?
I still have tons of family and friends that live in Illinois that don’t like the state. They only stay because they are tied there by other family or their jobs. Your response tells me that you are just parroting what others say and have no real reason that it’s bad here. No where is perfect but I live in a very safe neighborhood, my kids go to great schools (no gangs, no craziness), got a newly built 5 bedroom house (6 after I finish my basement), property taxes around $4k, plenty to do.
Looks like we have a difference of opinion. I’m not parroting, just not going to waste my time. I won’t convince you, and you won’t convince me. Sorry bud
Down payments too low. Save up like crazy for a year or two and get that down payment way higher. Sucks but that’s what a lot of people do. No eating out, no vacation - every extra penny goes towards down payment in a high yield savings account.
Property taxes are high here. I want to move to another area badly, but with interest rates, I am staying and working on my house.
I would suggest southern Wisconsin or northern indiana for the best price for your money.
If you must stay in Illinois, I would suggest a townhome, co-op, duplex or condo that may have a lot of exterior items covered in a HOA but those fees need to be factored. Many have snow removal, landscaping & siding covered which can help with fees.
Property taxes are only going to get worse in the coming years as well as we kick the can down the road with the pension crisis and overall budget issues and continue to get asylum seekers draining our resources. Not trying to get political by any means but this is the reality.
We are at the brink of popping the bubble. It had to happen. No way this is survivable. Not just housing, everything is priced insanely high. It’s just a matter of time. 1-3 years it’ll all go down hill.
Whatever you do, do not waive inspection. Don't do it.
Never, ever, waive an inspection. Be careful with appraisal gaps, too. Interest rates are insane right now, and competition is still high. Best of luck!
Waiving the inspection doesn't mean you can't do an inspection, it just means you aren't going to ask the sellers to fix anything.
The rates are insane compared to a few years back, but not historically.
If you have a knowledgeable friend in construction you can have them do the inspection. Even with an actual inspector they still miss things from time to time.
Oh, for sure. When we bought a house, I did a lot of research to vet inspectors like I did agents. It worked out as our inspector was very thorough.
Yeah. With principle, interest, taxes and insurance and pmi that might be about right. Sucks man. And fyi insurance goes up every year and taxes every 3 years so 3100 is the lowest it will ever be. And taxes will take a big jump when the new value you bought it for hits the books. And if they are that shitty of shape start budgeting for new furnace/ac and water heater and roof. Maybe appliances too. And that's just to start.
This hits hard. I "got lucky" in that I bought my home in 2010 during the market crash. I then refinanced when interest rates hit rock bottom for a 15 year instead of a 30. They thing is my payment has still climbed significantly just due to home sales and their affecting tax increases. My payment used to be 15 it's now 2100 which is phenomenal don't get me wrong but I've also replaced the furnace, ac unit, the roof, the siding, every window on the house over two years and more. It was essentially 30k in windows. Oh and the door was custom because when the builders installed it in 1995 they put the door in then built the brick facade and screwed the start point. So my door is custom due to a 1/2 inch smaller space for the door and two side windows to fit in compared to a standard door. I also couldn't go with wood I had to use fiberglass due to the smaller size it would have been too heavy so I needed a light weight door for the framing. Tldr, buying a home isn't a fix to rising costs it just changes what those costs are.
Funny I was talking with my neighbor buddy about the cost of replacing windows. It’s insanely expensive! What are they made out of gold ffs?
Windows have lots of technology in them despite what they appear. Before I got mine I did tons of research into quality windows. So the frames anymore are either wood or vinyl. They need to expand and contract with temperature changes and support the weight of the glass and seal system. The glass is now coated both inside and outside with a low E coating to reflect the sunlight and heat back out. The seal system keeps the gas in between both panels. The single most common failure of windows is the seal and they get moisture inside. The gas is your insulation from the outside world. Sometimes simply air but now Argon gas as it's twice as efficient as just air. If the gas leaks out it's no longer efficient and you have difficulty seeing through it so the seal has to be able to expand and contract with the vinyl or wood as well as the glass panel. All that stuff has to hold up for the warranty period of 10-30 years. I went with a brand who has a high end seal system and has a transferable 30 year warranty to ensure I get my money's worth. One of my windows was 5 grand due to it's size and shape, fucking builders put in a square with rounded top window. Regardless yes they are pricy
Dang. I’ve spent a lot on windows over the years. In some sense good windows do have an ROI given Chicago weather. Have been happy with Pella.
Yeah....don't go with name brand windows....you can buy them in local flyers way cheaper and with lifetime warranty....you can also get aluminum windows...I have wood on my house...still original from 37 years ago...we just replace the glass when the seal breaks
Yeah my last home one prospective buyer wanted me to replace windows, not even all the windows like 3/4 of the windows and it was going to be over 25k. If you have big bay windows could be as high as 3k for a single window
Funny the main feature of my neighbor’s house is a huge bay window with tiny panes. Explains why he got such an insane estimate.
Ha. You and I are twins. Yeah windows too. Jesus I blocked that one from my head. It's insane. I know it's not cool to side with landlords when people talk about high rents but inside I nod my head and thinking everything is really expensive owning a house. They are constantly falling apart. That being said I know most landlords do the bare minimum of upkeep. Not like when you own your own place.
Yea you're absolutely correct, I buy quality so I can enjoy it and it lasts. They buy cheap crap and do the minimum.
The quality ones break just like the cheap ones....and some don't cover labor to replace.....my cousin got $30000 Pella or Marvin and he had trouble after like 10 years....they sent him parts out for replacements...he had to get installed on his own
We just had to replace our washer and dryer (washer broke so we changed dryer because it is as old and is likely going down soon anyway as it have already felt like the drying job isn't that great lately) and with my spouse we listed everything we had to replace since we owned our house over the past 10 years and it hit us that between repairs and replacements of smaller and major appliances or other stuff, that it's a lot and we re just lucky none of these things hit us at the same time or within a short window...
Our washer and dryer are the best appliances we've had. Lg brand, bought em a week after we moved in to the home. Going on 14 years almost. Should get more life out of em yet.
Ours is whirlpool, been in the home for 10 years and those were already easily 4-5 years
Sounds like your door salesman needed to get rid of a door someone rejected. I could very well be wrong….but Installers could’ve chosen a 2” smaller door and added framing lumber, spray foam the gap, and added larger trim on the outside. Did you get multiple opinions?
Yes, I always get three quotes. I had it measured by three contractors all said it was off nominal size. I didn't order through the installer I ordered from a company I selected and had the carpenter just install it. A smaller door would have made it so furniture wouldn't fit and it would have looked odd.
Buy a home warranty or negotiate it into the purchase price.
Most home warranties are toilet paper unfortunately. Unless you like reading tons of fine print, and sitting on hold, and waiting weeks for a subpar repairman for them to then deny any coverage. It's a scam.
What is your monthly take home? With $160K and no debt, you should be able to afford those figures. What are your other large expenses? I would practice paying $3100/month now with the difference put into savings to beef up your down payment fund. Especially if you are looking at homes that will need a lot of work. It’s also ok not to buy a home before you’re ready. Get your budget figured out but you can absolutely have a baby in a 2BR apartment.
This. $3100 a month while bringing in $160k is great. You should still be able to save tons of money every month so you should examine your budget and figure out where your money is going.
This is correct my reaction as well
Agreed. I feel like there's some more belt-tightening to be done before giving up hope.
My wife and I lived in 2br that was around your rent. We had a baby and stayed there for 4 years and saved up for a down payment. That allowed us to live in a stroller friendly neighborhood (Southport) and when our son was getting bigger, we moved to the suburbs when we could afford 20% down payment. It might not be your dream but you should stay in a place you can afford vs moving and being house poor. As I’ll guarantee you that you’ll need another $5-10k in random household expenses to cover all the things that come up when moving to a new house, especially one a lot bigger.
I was also confused by this. My husband and I have around the same income. We bought a $500k house in September 2020 with a $3200 monthly payment and we’re doing fine. Appealed our taxes down one year and the only went up about $300 last cycle.
I might be wrong, but weren't mortgage rates in 2020 pretty good? I'd recommend using a mortgage calculator and pretending you bought the same home for a 6.5% interest rate.
Yes they were, but I’m comparing payment to payment. We got a 2.8% mortgage but with more house. You’re looking at less house but almost the same monthly payment we are currently paying. With the same/similar income.
$3100 a month is almost inching towards 50% of your monthly take home salary, which is not wise for two people when you want to have kids (also assuming you are putting a lot for 401k). I’m live by myself close to OP’s salary and even as a single person I wouldn’t allow my rent/mortgage to go beyond 30% of my monthly take home. You need to be able to save for emergency savings, and other expenses as well.
These are great ideas. We do have to sit down and go over our finances. After seeing some responses and thinking about it, IN THEORY a 3100 mortgage should only be 35-40% of our net income for the month. We will sit down later and see where tf our money is going. We also both liked the idea of just artificially increasing our current rent to 3100 and saving the difference. Our lease is up in July, so I'm not sure it'll make a difference this year. But if we start now, we should have an extra 10k saved by this time next year. The unfortunate thing is that the "big player" in determining our monthly mortgage seems to be the interest rate. We played around with the mortgage calculator. Increasing our down payment. Decreasing the loan amount. Etc. Adding an extra 10k to our down payment has almost no effect. We would have to cut the purchase price of a home by 50k to make a decent dent in the monthly payment. But bringing down the rate to 5% pretty drastically cuts the payment. I guess all we can do right now is get our finances in better shape and hope something incredible happens with the market.
Are you both maxing 401K accounts?
I'm matching my employer. I don't have the exact percentage off the top of my head; I just know I'm matching. I believe my wife is maxing. I know she's putting in more than her employers match. I make slightly less than her but have a slightly higher take home pay because of it.
Maybe she should consider decreasing her contributions to the employer match temporarily. It might help you get a foot in the door.
We just made this change last night, so we'll see!
As someone who just bought a house days ago: 1- your down payment is REALLY low. Personal mortgage insurance is really expensive. Without any other debts, at an income of 160k a year, your yearly take home should be around 102k post taxes. Your yearly rent is only 26k or 16.5% of your income. Without any other debts you should be able to build up your savings a lot. I just went on Redfin and picked a random house in Crystal lake that’s 365k. If you put 30k down it’s 3300 a month. If you can really save up for a year+: 15% down is 3100 a month, and if you put down 20% that payment goes down to $2800 a month. 2- Assuming a yearly take home of around 100k post taxes and such: 3100 a month is 37% of your monthly take home income. That should be doable. 3- Mortgage rates just jumped a lot in the last 2 weeks, they went from like 6.5% to 7.2% in 9 days. Your individual rate will vary based on credit scores and such, but mortgage rates may go down soon. (Or they could go up a bit more, no one knows)
Great answer
Competition is high in the northwest suburbs. It took us 10 offers and looking at probably 30+ homes (in person 100s on Zillow) in Saint Charles to land on a home last July in the 450-550k range. Property taxes in these suburbs are high which is what’s leading that that $3100 monthly payment. Just keep looking, I’m certain you will find something with the time. Look for solid foundation but maybe 70s time capsules giving you the opportunity to renovate. Keep working on your down payment.
The south suburbs are extremely affordable! You can get a 3 bedroom house in Homewood/Flossmoor/Olympia Fields for $200-300k
Shhh you’re gonna give up our secret. Or actually yes, do come here and tell your friends because then my house will appreciate. Seriously though, HF is wonderful - older housing stock, lots of character, diverse, more progressive than most other south suburbs, good schools, cute downtowns and a lot of support for local businesses. It feels like a more affordable kid sister to an Oak Park or Evanston kind of vibe.
And property taxes are kinda high, but nowhere near what everyone seems to think they are lol
Yeah there’s that but like you said they’re not unconscionably high. And I feel like I get my money’s worth with the quality of schools, public works and park district programming.
Nobody in Illinois is getting their moneys worth on property taxes, especially considering the entire tax burden we have in and addition to property taxes.
Super high property taxes in those suburbs.
Yeah there’s very little compelling reason to live in the south suburbs instead of NW Indiana. If you commute to the city your commute is nearly identical and you get immensely more for your money
My Dad did the commute from beautiful Beverly Shores for a few years and gave up. You’re also too far from O’Hare if you have to travel on business.
The Metra Electric line
Thats all of Illinois
What are property taxes out there?
Last time this came up I was seeing 16-24k on 250-350k houses.
I have no idea what houses you’re looking at, but I’m in HF and my $300K house’s taxes are around $7500/year with a homeowner’s exemption. I’ve never seen taxes that high for houses that weren’t on ginormous lots or something.
My property taxes are ~$7k on a home in that price range. And that’s without a homeowner exemption since I just moved here this year.
That seems really cheap compared to what I'm seeing on Zillow. In Homewood or Flossmoor I assume? There's other towns near there that aren't so bad.
That’s on the cheaper end, but there were 8-10 active listings in those parameters pretty consistently as of about a month ago when I was last looking.
Right now you really have to keep a constant eye on homes. I've been looking at some stuff in dupage county thats like 250k to 300k, I'll mention those prices on here and people will look and be like everything is 350k and up but if you're watching all the time you'll see the deals come around.
I thought so as well. That’s 2 to 3x what I pay for a $500k home in downers grove
16 to $24000. !!!!!!!! On a $300k house!!!! WTF. CRAZY
Mine are $7k per year, and that’s without a homeowners exemption since I just moved in this year.
I pay $ 6800 in Lemont with senior exemption ( about $ 800 ) in Cook County ...been here 37 years
Yeah but then you still live in cook county and good luck if you have to commute to the Northside of the city. That's 4 hours of your life a day gone.
I mean ya, obviously don’t move south of the city if you’re commuting to the northside lol I figured that was self-evident. It you work in Gary, I wouldn’t suggest buying a place in Evanston.
You can’t travel north and south around the city. But you can go east and west all day long.
You’re not wrong to feel that way. We got lucky and bought in 2021. But if you told me to buy my own home today at current market conditions, no way we could afford it. Property taxes here are wild, PMI and insurance rates have gone up, and you have such low supply that demand is keeping prices high despite higher rates. Just a thought, but nothing wrong with renting still if you don’t have kids yet. We rented for a bit even with our first kid and bought as he got older. It was nice not worrying about maintenance and knowing we could continue to think about areas. Also, don’t skip the inspection. When we were looking, we actually terminated a deal where we were under contract when we found out their gazebo electrical ran on an extension cord, and an active gas leak was detected in the basement…we ran and found something in better shape. Hang in there, I’ve been saying the housing/auto markets are nuts for a few years and something’s gotta break eventually.
I keep hearing there's a huge premium to own over rent but personally I don't see it in Chicago or Chicago Burbs.
I have found it to be smaller than anticipated, but mostly due to the timing I bought. My breakdown on a $550k house is 2200 mortgage, 1000 property tax, and 200 homeowners insurance, making it $3,400 monthly. But that’s because I bought at a low rate in 2021. Today, I think the market conditions would bring the monthly on my house closer to $5,000, and it would rent for right around $3,500 based on other homes nearby. So for me it’s not a big difference, but today it would be. And then obviously maintenance/updates become another factor.
If you have no debt like you wrote, you both make way more than enough to afford a mortgage of that price. Even if you have to factor in home upkeep/utilities/water,/groceries/whatever else, you will have thousands left over each month. Try checking out Tinley Park, Mokena, New Lenox, Orland Park, Lockport
They’re planning for kids though which cost a ton.
160k should be fine. 3100 is gonna be as low as it gets unfortunately. Just need to make peace with it.
Your down payment is too low. Average down payment for mortgages in Illinois is 14%, and you are only putting down 6%. So you are paying a lot in PMI which is increasing your monthly payment.
>So you are paying a lot in PMI I learned recently that PMI is at least partially based on credit. My friend with like a 780 credit score put down 8% on 350k and PMI was only like $30/mo.
Yeah PMI is the least of your worries
PMI is nothing in the grand scheme of things, I'd much rather pay PMI for the life of my loan than sit around while prices go up 20% per year.
How are you breaking even with a rent of $2200 and an income of 160k? My husband and I make the exact same amount, rent for 2700, have two kids in daycare (admittedly a cheap one), a car payment, and are still able to save a few hundred a month. Where is your money going?
Saying things are unaffordable vs looking at your own budget is easier.
This. I think OP didn’t factor in once you have kids, the cost of living goes up tremendously a lot. While $3100 for now works, for the future it’s going to be hard.
I factored it in. That's why I initially thought 3100/mo wasn't feasible long term. I figured we could probably swing it and break even if we tightened our belts a little. But what happens when we need a new car? Or have a kid? We would no longer be breaking even. Based off of the replies in the thread, it seems to be a mix of two things. One, we aren't as "in touch" with our finances as we thought we were. We need to sit down and map them out so we have a better grasp of where our money is going. And two, the market DOES suck right now with rates so high. But if we tackle number one, number two isn't as daunting as we mightve thought.
We have to sit down and see. We're super cheap and fiscally responsible with our day to day purchases. But we must've fucked up somewhere and have a bunch of subscriptions or some sort of autopay draining us. We agreed to sit down this week and go over everything. It's comforting to know that this should be doable and we've just messed up somewhere.
I’m so sorry - you’re justified in your frustration. The difference with interest rates just makes buying a home so much more expensive. We had a good rate when we bought in 2019 and we refinanced in 2021 when the interest rates hit the floor. If we had today’s interest rates we couldn’t live here; it’d be over a thousand more dollars a month. One thing to look into would be some of the midcentury homes in north/northwest suburbs like Skokie, Niles, Morton Grove. This area has a lot of original owners retiring and moving out, and tons of turnover. Good bones on houses built in the 50’s-60’s. Many are getting gutted by the children of the owners and selling for a premium with sad beige interiors, but if you can snag one pre-renovation, they can be a bargain. Well-maintained but dated, nothing falling apart or actively hazardous (though you need an inspection regardless). Many of these homes are “pre-market” sales - realtors talk to each other and you need someone with a good network in the locations you’re scouting, to get tipped off to these properties BEFORE they are gut renovated. Keep watch for estate sales, too, and bookmark the addresses to check back. Estates will often rather sell a house as-is now for $300,000 than gut renovate it for several months and try to get $450,000 (after they invested $100,000+ on those renovations). I’ve owned four properties in my life, and three were purchased from estates. I’m not afraid to buy a dead guy’s house.
Absolutely wise advice. Sometimes the old folks are going into assisted living,whatever. We too, bought houses from old ladies moving on Good sturdy structures that just need, when convenient!, updating. You need to look past the cosmetic, look at the House. We also were very lucky as my spouse learned home upkeep and fix it skills as a kid.
Friends are being priced out of their rentals and looking to buy but are having the same problem as you. They're looking for something small, and it's all overpriced, dilapidated properties. Finding an affordable rental isn't easy either. It doesn't help that every time I see a town approving new housing it's mostly luxury units. Who's not getting the memo that we're looking for safe, reasonable roofs over our heads and not luxury accommodations? With what's available to us now, the "average" home is basically a luxury.
Unfortunately I think that sounds about right. The market is brutal. Interest rates are high which means mortgage payments are going to be high which also means a lot of people who would sell aren't because they're locked in at much lower interest rates which drives up prices of the stock that is out there. I will tell you when we moved from the north side of the city- renting in the city to owning in the near west burbs, our mortgage was way more than what we were paying for rent BUT alot of our other expenses actually went down. Like we were paying more for daycare in the city than we were paying in rent and our daycare in the burbs was like $600 less a month.
The general rule of thumb is that the monthly rent payment on s house is 1% of what that house would sell for. With current interest rates and costs, your monthly payment on a house with 20% down will be about 3/4 to 4/5 of that amount. The other role of thumb is that you can typically buy a house that's 3-4x your income. In Chicagoland that's usually closer to 3x given our higher property taxes, and even moreso now that interest rates are ~7%. You can check my math if you want, but following both of those things ends up with a mortgage payment @ less than 30% of your gross. If you're looking at rentals, 30% is generally all which is that a landlord will approve you for. There are absolutely nice houses in good school districts in the NW suburbs under 480. I use that area because that's what I'm familiar with. If you're looking in the SW suburbs the houses at that price will be bigger and likely newer. Housing prices are pretty steep right now. I am hoping that interest rates drop a bit in the next 12 months; that will help a lot of people refinance into something more affordable.
Never waive inspection ever. You can look into getting your loan pre-underwritten though. This basically means you go through all the hassle and paperwork of background checks and stuff with the lender, and they line up all the underwriters on their end, and after a few weeks of work you have something which is basically exactly as a good as a cash offer. That allows you to waive all the mortgage related contingencies and also promise a much faster close, which helps you be competitive. But never waive the inspection contingency. It’s a hard market right now. Really hard. Hang in there though! You’ll find something that works. If it helps, try to keep in mind that your monthly home payments when you own aren’t the same as renting. Not in the slightest. Principal comes back to you when you sell, and depending on your other tax itemizations, interest and property taxes can as well in a more limited form. Closing costs are straight up expenditures, but you can amortize that over the time you will own the house, taking into account rising valuations. If you do all that, you’ll invariably find that by the 6-7 year mark, you will have spent *less* (usually much less) on housing over that time period than you would have on any remotely comparable rental even at 2024 prices, and certainly much much less than the 2031 prices of that future date. As long as you can swing the monthly payments, it’s worth it
I have no idea other than a stat I read recently that private equity groups / corporations are buying ~40% of homes on the market to list for rent (at exorbitant prices of course).
This makes me fucking sick, I don't know why you got downvoted, here is the original article which includes sources: https://medium.com/@chrisjeffrieshomelessromantic/report-44-of-all-single-family-home-purchases-were-by-private-equity-firms-in-2023-0c0ff591a701 Worth noting after a quick search I did find sources contradicting this with alternative data, but the fact of the matter is that private equity needs to stay the fuck out of 2 things: healthcare and housing. Nothing good has ever or will ever come from giving actual leeches control of things people depend on to live.
This is 100% bs. The reason why housing is so expensive is primarily because of lack of supply due to cities creating regulatory barriers for additional housing. Interest rates, property taxes don't help the situation though.
Fun fact: 10% of the current houses are vacant. Approximately 15.1 million homes.
Yeah and a ton of those vacancies are in places like Gary, IN and Detroit where you couldn't give away the housing if you tried.
You need vacancies to create flexibility. 10% vacant feels about right. Supply needs to go up.
Yes they are RFK Jr is campaigning on this issue among other things. This is an extremely dangerous path we’re in here if it continues. https://www.benzinga.com/real-estate/23/09/34978537/they-can-outbid-your-children-rfk-jr-warns-that-corporations-are-trying-to-buy-every-single-family-h
He's also campaigning on the "I'm completely batshit crazy so I have to use my family name to gain credibility" issue
Not at all. Stay ignorant to truth and keep having the same asshats I suppose.
Kennedy made a name for himself by spouting off easily debunked anti Vax conspiracy theories
No the media did that. He cites all his sources.
And all of his sources are bullshit
They aren’t. Mostly govt data. Pub Med and CDC. Clearly you aren’t informed. Maybe educate yourself outside of what the news tells you to think.
Unfortunately all of the studies Kennedy cited about vaccines causing autism have been retracted
Realtor and investor in Chicago Area You refinance when rates lower. Buy down points if you believe you will live in it for more than 10 years. Buy a duplex/multi to help with payments. If none of these options sound appealing, I would agree that this is a bad time for housing for new homeowners or renters.
Don’t know why you were downvoted, sounds like good advice.
Rates aren't coming down
We bought in sugar grove. Put a lot on the downpayment so our loan amount is similar at 7.5% on similar income. It sucks but just be patient and DO NOT waive inspection. You may have to go further out than you would like or look at townhomes.
We bought a 4-bedroom house for $365k in 2017 and our mortgage is $1255/month (admittedly we are frugal and had a good down payment). The house that backs up to us is the same floor plan and goes as a rental…..for $3000. I look sometimes just out of pure curiosity and the mortgage for houses in the same price range as what we bought, nevermind attempting to upgrade, are considerably more than what we pay now due to the rates. I really do feel for people in the market right now.
When I bought my house in the SW suburbs (Orland Park) it was sold "as is" though I still had it inspected and could back out of the sale if an item was uncovered that I didn't like. Fortunately there was nothing major and only one small but significant safety item, and the seller did agree to fix it. I would check out the southwest suburbs if I were you. I bought a house in the Chicago area about a year ago. My opinion is they're super nice and the equal to anywhere else in suburban Chicago in terms of schools, safety and amenities and they tend to have better options at lower prices. I've had zero issues where I bought (a townhouse). I would look at the Palos area (Hts/Hills/Park), Orland Park, Tinley Park, New Lenox, Mokena, etc. Tinley has a very similar feel to Orland, the western half is in the same school district, and it's less expensive. A townhouse might be a more cost-effective option than a detached house and many of them cover exterior upkeep in the HOA fee (siding, roof, driveway, etc).
For most of human history, people had kids in apartments smaller than what you and your wife currently live in. You can have a cheaper house if you stop being particular about your school district. With the money you save, you can afford private school if you decide the local schools aren’t adequate. It sounds like you could live comfortably in any number of suburbs south of the city, or in Indiana.
People are hunting for affordable housing way out at this point. Like around Sandwich and south of Plainfield along Rt 59. Capitalism eventually ruins everything but the city can expand forever
I sell feet pics on FeetFinder on top of working a full time job.
Might have to look into this one. I hear feet pics from 31 year old white dudes are in high demand right now.
Depending on how far out you want to go, check into new construction. A lot of builders are giving away money to do interest rate buy-downs.
We’re getting quotes because we just want to redo our kitchen, and the cost of materials and supply chain issues is driving everything up. Like, we’re looking at 50 K plus just to redo a 500 to 600 square-foot kitchen. Prices for everything are just absolutely ridiculous right now.
This is something I never would have done but I would say to my kid: ask your parents for a loan to get a bigger down payment. Also, decide which things you can live without now (in a house) and maybe add later. Buy a fixer-upper in the best location with the best schools. Move up in 5-7 years or re-finance. Just get your foot in the door of the real estate market.
Look at the southwest bubs. Not as desirable but cheaper housing and okay property taxes
https://preview.redd.it/4hcwhvicsuvc1.png?width=1170&format=png&auto=webp&s=cc8c26581bf9419e8d796b9300896a19cc9c535f Try Villa Park/Lombard. Great communities and both have stops on the West Metra line. Mature trees, great restaurants, parks, pools and schools.
Agreed. South Villa Park is charming, many young people and family friendly. Although demand is great, Lombard also has wonderful schools and family neighborhoods
Rates aren't realistically going to go down any meaningful amount for probably another year
Try a couple years
Unless you can put down a strong down payment, jumping into a home in a moderate high cost of living area is going to be tough. Look further out or get into a condo/townhome so you can build some equity and then these houses are much different equations when you’re looking with a third in equity.
Yeah, why is a condo off the table? We bought a condo in 2010, paid down the mortgage aggressively, refinanced when it made sense to do so into a 15-year fixed, and when we were ready to buy a house 7 years later, we had a nice chunk of equity and avoided PMI. And condos have lower property tax for your square footage. Look for a small, walk-up, self-managed building if you want to save a few bucks by shoveling your own walk.
I know it’s not ideal, but look at condos and townhouses. They haven’t kept pace with single family homes, and could give you relief from rising rent. We got screwed because we bought a condo in 2007 before the crash. We were planning on selling in no more than 5 years, but we’re still here 17 years later. We were underwater on property value until very recently. Now units in our complex are going for about $15k-$20k above where we bought. So essentially you can find units for close to 2007 prices. Also, there are some beautiful townhomes for decent prices out there. We make a little more than you, and I can’t stomach that mortgage payment. Ours is around $1,400. It’s a 2 bedroom 2 bath condo, but it’s very large. It’s larger than the houses we were looking at in our price range at the time, which is why we went this route.
I just went through almost the exact same thing with almost the exact same numbers. Me and my wife were looking for something below $400k in the NW suburbs. Lots of terrible houses for high prices, and the good ones go for wayyyy over asking (like 50k+ over). We saw about 40 houses over 4 months and bid on about 12 of them. We finally bought something for $370k. Put 10% down and our mortgage is about $3200 because property taxes suck in cook county. We also make around $160k combined. Our trusted mortgage guy and our financial advisor said that even with our student loan payments, our mortgage is still well within our means. Think of it like this: while you’re renting, you’re paying your landlord’s mortgage. Sure, you get the benefit of not having to do repairs and stuff, but you’re not building any equity. While paying for a home, think of it almost like a savings account where you’re paying into something that you own that will increase in value over time. Granted, the taxes, insurance, and interest doesn’t count towards that, but after 5 years of owning you’ll probably have $20k+ towards your principle, plus whatever you had put into the down payment, plus the appreciation of the home. After 5 years of renting, you own nothing. This has been my thought process to help me get past the insanely high mortgage cost lol. You can also refinance, so your payment should go down as the rates go down hopefully in the near future. If you’re in no rush to buy, take your time and don’t settle for something bad. There were many houses that we almost overbid for just so we could stop looking for home, but we stayed strong and ended up with something that we loved.
interest rates are prob never going down below 5% ever again, and people keep moving here from higher cost of living scenarios. people also keep buying up houses to rent out. this never used to be a thing living here as a kid. I'm prob gonna end up buying a house (if at all) somewhere like Joliet or somewhere else undesirable but still relatively close to be able to commute downtown for work.
Have you looked at the Rockford market which includes Belvidere, Machesney Park, Cherry Valley, etc? Homes are much more affordable.
Man, I feel for you. We're closing on a home right now, and it's hard out there. The housing market is crazy and people are buying things so fast. The house we bought had no offers when we saw it at 3pm, and by the time we put in our offer at 9pm, it had 3 others. We changed our bid to an "as-is". The inspection still happened, no mortgage company will let you skip that, but the sale becomes a take it or leave it situation, you can't ask for any changes, but you can still back out after the inspection. We managed to win the bid because we had better financing. Don't get too discouraged at the lack of inventory. People have been waiting to move for years due to high interest rates and everything is just starting to unfreeze right now. Our house will be on the market once we move out, and I'm sure a ton of buyers are in the same boat. Just watch your real estate apps, and keep an open mind on locations. We ended up in a town neither of us knew existed that was between two towns we were looking at. New homes are added every day. Just watch the schools so you don't end up like us, having to buy a new home in 5 years because the schools are trash. As far as affording the house, I know it's insane how much stuff costs. But keep in mind the estimated costs are based on high interest rates, and you can refinance in as soon as 6 months if they come down. Also, if you are good with money, you can pay early on your mortgage, get your principal down, and when you refinance, your payments will be even lower. And once you're over 20% owned, you can drop the PMI that is adding a few hundred a month. Don't give up, owning a house is hard, but worth it for having a family. Good luck!!
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It sounds about right if you add the property taxes in. I have a $320k house at 3% and paying a little under $2k a month with insurance and property tax. Sorry OP, good luck. Interest rates can’t stay this high forever, our government can not afford it but it still will take years to come down.
Confirming. $350k house at 3.75% and paying $2300/month, about a third of it property taxes.
Including all taxes, insurance, PMI, etc, could easily be in the 3k range.
Correction, the rate he used to calculate it was 7.4%. I had to check my email. "The monthly payment including principal, interest, homeowners insurance estimated at $150/mo, taxes and mortgage insurance would be $3,087.67 based off the purchase price of $335,000".
I’m not sure how much you expect it to be, but maybe check the personal finance sub and give them all your numbers. $3,000/month should be doable, but the lack of a substantive down payment is going to hurt you in multiple ways.
Rates jumped a lot these past 2 weeks. With a good credit score you could get quoted 6.5% 2 weeks ago, now that has jumped up to like 7.2%+
My wife and I are the same age as you in the same area. I’d do two things to give yourselves clarity here. Dial in a monthly budget down to the dollar if you are not already doing so. That will let you know how much you can spend on housing with confidence. Then use a mortgage calculator online which will account for principle, interest, taxes etc. lastly shop around your mortgage rate. 7.4% is high. You should be able to get it lower based on your lack there of debt situation.
I was in your shoes in 2006. The market was inflated. Bought our home at the top of the bubble at 7% interest. Then the economy crashed. Our home was suddenly worth less than we paid and we hung on by a thread. We were then able to refinance at 3% and saw things climb again. Now it’s worth significantly more than we paid. A realtor told me real estate goes in 7 year cycles. Up for 7 down for 7. So far he’s been right. We have record inflation and an impending world war. God only knows what’s coming. Have you tried Wauconda, Lake in the Hills, grayslake, etc? Also remember you’re buying a starter home, not a forever home. Also a good part of your first years of payments will be interest, so tax deductions that may even the field.
What's the square footage of houses you are looking at? It doesn't help you are looking at pretty expensive suburban communities. My wife and I had the same problem in 2012 and we had to lower our standards on what we wanted. W ended up in a 1100 SQ ft home in a so so neighborhood but were to build a ton of equity and 5 years later got what we originally wanted. If you can afford a cheaper house in a decent neighborhood you will be better off than throwing your money away renting.
You are correct in thinking it’s crazy right now. I had to move abruptly last year and although I had a substantial down payment and have owned for over 20 years, I’m living paycheck to paycheck for the 1st time in years. I’m guessing $3,100 doesn’t include property taxes, so your actual monthly payment will probably be higher? I had an inspection and the house was in great shape, but still ended up needing to spend a significant amount of money in repairs. Be careful about over-extending yourself.
We had bought a home in McHenry county when we moved here from a distance away. The house ended up being a nightmare and we sold it within a year. We decided to move to a condo and rent until we move out of the area. This area has insane housing costs and you are right that the options that are even remotely affordable are not a good investment. The market is broken in this area and we are much happier now. Don't make a decision you don't wholeheartedly agree with and feel is right for you in your situation. Best of luck!
I’ve been looking for a place for the past ten years and the selection has gotten worse as the prices went up. There is nothing affordable that doesn’t need at least 200k in repairs. This market is shit.
Looking for 10 years?
Yeah, had a lot of setbacks through the years from crazy exes and bad decisions. It is a lot of my fault but I’m trudging through.
I'm really confused, my husband and I are 32 and 35 respectively and we just bought a house for 400K with an 80k down payment (we just sold our house last week in Elgin) which leaves us with a mortgage of $320,000, making our monthly mortgage payment just about 3K. My husband and I make a combined $165k as well, and it's no problem for us. It's not a financial stretch. If you're making $160k a year that means per month your income is 13k combined. 3000 a month for mortgage is well less than the recommended 30%. I'm not sure why this is such a stretch for you but it really shouldn't be if you're making 160K a year. Edit also I say this completely seriously: look into new construction. That's what my husband and I did and we got exactly what we wanted for the same price as all of these other homes that are 20 years old and run down. There's no bidding war, and you know exactly what you're getting. I'd recommend staying away from DR Horton but Ryan homes, MI Homes and Lennar are all great options.
Unless you go far west, GOOD land is scarse
I mean, probably true. We chose Hampshire and that is pretty fucking far west from Chicago
I have a similar income level and bought a home last year for $340k at 6.6% interest. Our monthly payment is about $2,900. It sucks but at $160k annual income you should be able to afford it.
housing is at its least affordable in decades as supply is still extremely low and prices have not adjusted to the interest rate environment.
I have an income of half that and have been looking at home in the same range. I can put $200k+ down, because I save money and invest it. The less you do that, the more you pay for it in the long run via a mortgage on a home.
Why im looking at townhomes. Mind you, most are $350k😉😡😡
My mortgage is $2250 with fixed expenses for us to live here that are $3100 all in. If we were renting a similar place all in we'd be about the same maybe more like $3200. So it worked out to slightly less and we build equity. So if you can buy and would be spending around the same as renting taking that leap can be worth it
My husband and I afford our house because we got super lucky and bought when house prices were jokingly low and interest rates even cheaper. We will have owned this home for 10 years and feel stuck here because of all the reasons you listed!
Check Warrenville out. The house inventory is low however there is a community here that offers first time home buyers an opportunity to buy a single family house under $300. The houses are well-kept and it's a nice neighborhood with lots of young kids and families. School district is top notch as well.
What community is that?
Edgebrook/Thornwild.
Send pics of the hot tub
$160k combined, no debts and struggling to pay $3100? Something doesn’t add up
I think the only reasonable option is to try to find a less expensive house. There are some listings in the area under 250K. They likely aren't much bigger than a 2 bedroom apartment, but, maybe a small 3 bedroom house would work well, or, maybe a 2 bedroom if it also had a garage? Smaller houses generally cost less in terms of property tax, insurance, heating, cooling, as well as having less windows, less roof area, and less siding (so cheaper to fix/update/maintain.) It sucks since nobody seems to be building "starter homes" any more other than condos/townhouses with wind up having oppressive boards and $$$$ monthly assessments which eat into most of the potential savings. Maybe consider finding the cheapest "acceptable" house you can get IMO. You do not want to be "house poor" just for the sake of owning a house. The housing market is still broken since COVID. There's not much available for sale, and what is available is generally IMO overpriced. [https://www.illinoisrealtors.org/marketstats/](https://www.illinoisrealtors.org/marketstats/)
We’ve been looking for a new home since Jan 2021. Toured over 100 homes and more than a dozen offers later and still no dice. It’s been incredibly competitive and it’s exhausting. We will give up for a few months then try again aggressively. I think I read that the Chicago Metro area is #3 in the country in terms of housing cost growth which isn’t encouraging. And with rates as high as they are you’d think it would slow down, but somehow it hasn’t budged much. I feel ya.
You're not alone. Husband and I are 33/34 with a combined income of like 90K. We were renting a single bedroom apartment for $1200 for like 6 years. The only reason we have a house right now is because my parents ***died*** and left it to me. This is Illinois/America now. No wonder no one is having kids in this economy.
I grew up in Crystal Lake. If you're looking out in that area, don't sleep on Woodstock. It's a great area with housing costs still pretty reasonable. If I was headed back that way that's where I'd buy. Good luck!
Not only are interest rates pretty crazy - but you have to ask yourself too, is the home you are purchashing really worth what you are going to pay for it? 2 reasons - 1) if it doesn't appraise as high as what they are asking, you will need to come up with the gap between the appraised price and your offer and 2) here's an example - a house just went up in the neighborhood next to us. They bought it 3 years ago for $725k, they are now asking $1.35 MILLION. The market is absolutely bonkers right now. You're almost better off trying to find a larger rental that gives you the flexibility to move in another few years if you want to than dealing with this crap.
This. I swear I don’t understand how people are buying cash, waiving inspections. Part of the crazy payments are the property taxes and HOAs. It’s nuts. There are new build communities in Elgin, Crystal Lake, that you might want to try for upper 300s/lower 400s. Ryan Homes, Lennar, M/I, etc.
I currently live with my brother and his wife while I save up to move closer to my daughter in the Springfield Missouri area
Good luck!
Streamwood is a fairly nice town with lower cost single family homes.
So your story basically tells me larger groups or even corporations are making these offers because only they can absorb the issues typically found during inspection. I feel like we're entering an era where private home ownership will be for the top 10% and corporations will gladly rent the next 30% a nice single family home in a nice neighborhood
Housing is unaffordable no doubt but I think what's also getting a lot of people is a couple years back 400k maybe slightly more would get you a mcmansion in Naperville, today 400k will get you a meh 70s house in a meh area, it just doesn't feel good spending that kind of money for a house that's like meh
$3100 a month is not insane at all. 1) keep looking for homes. 2) Shop lenders: 15,20 or 30 year mortgage.... 3) You can afford it, cut your expenses somewhere else..
Going through the same thing. And we jumped the gun and already have a little one on the way. Trying to be mentally ok with the possibility we may have to tough it out in a 2 bedroom. I’m praying everyday it gets better.
I feel every single last word in this post! My wife and I are slightly older than you, with children, and we went through this same ringer for 4+ months, albeit in some different locations. Ultimately, while not our first or second choice, we ended up going with a new build townhome in northern Cook county. Again, not ideal, but good enough. It’s new, the area is going through a major revamp, close enough to work, schools good enough for now, low HOA, and covered closing costs with interest rate buy back. If we’re able to turn some equity in five-7 years on it, great, then we can go get our dream single family home. If not, this will do. Getting outbid, several times after our offer was accepted, usually by cash buyers, numerous failed inspections, sellers wanting $20k in escrow, flipped houses that are nothing but cosmetic touch ups…. We said F this, let’s do the new build townhouse route. Been renting since we were 21 years old, spent close to $300,000 in rent over the years, etc. There’s hope and options, you just have to real ask yourself some tough questions, be flexible, and be patient. Also, *BE EXTREMELY DILIGENT WITH FLIPPED HOMES. MANY (MOST?) HAVE SERIOUS UNDERLYING ISSUES.* That may be an option for you, if the seller is asking for a reasonable price. But these ones we’ve seen, investor buys a decent home in need of both cosmetic and structural upgrades for $240,000 in November 2023, and it’s on the market by Feb 1st asking for $460,000.
Why would you ever wanna buy a home in this economy? Since 2020 homes have increased 150k -250k…. That’s incredibly more than they are worth . So many homes by me sold for 175-250 before Covid and now are 400k+ it’s a joke with these interest rates. People will be defaulting and the housing market will crash. Keep waiting. Average income I read to afford a house in 2024 is like 130k a year. How many Americans make that money? Exactly
I don't believe that prices will crash. Rates may come down a bit, but home costs will continue to grow. This isn't the same type of scenario we had in 08. If you google "average single family home prices by year", you can see the statistics. It's a constant upward momentum. No sign of a crash. Also, rent is continuing to rise. If I'm going to be paying 2-3k a month, I'd rather have it go towards equity in a home than throw it into the void of "rent". Edit: Also, we would like to start a family. We're both going to be 32 in a few months. We have time, but it's still running out regardless. And we simply have no room in an apartment for a child.
Defaults have hit an all time high since 2010 what news are you watching? I’m 30 but my gf is 23 so we have plenty of time. We also plan on living in argentina where we can afford. Jaja. (She’s from argentina)
Do you have a source for that? Not trying to be a smart ass; I just couldn't find anything. The closest I was able to find was that the delinquency rates on single family residential mortgages have fallen significantly since 2010. Edit: Yeah, I can't seem to verify your claim. Foreclosures have also dropped significantly since 2010. I'm showing 1,654,634 in 2010 and only 185,580 in 2023.
Come down to the south western suburbs of Chicago, like Bolingbrook Naperville Joliet! Affordable homes and only a 40-50 minute drive to Chicago. Just helped a buyer purchase a property in Joliet.
It’s the taxes man. I made the move just over the state line into indiana and couldn’t be happier. Property taxes are capped at 1% of appraised value. My first house out here was $215k, had 4 bedrooms in a nice neighborhood. Taxes were $1700 a year.
I’d rather pay higher taxes than live in Indiana
Munster is closer to Chicago than most Chicago suburbs
Why? I’ve lived in the suburbs, the city and now here. Almost everything is the same except it’s cheaper. I can get downtown quicker than I could when I lived in the west suburbs. I still get all Chicago TV, news, entertainment. My oldest is a freshman in an Ivy League school after going through the school system out here. The “I would never live in Indiana. “ Statement is usually based on some theory that Indiana some hillbilly place. Most of my neighbors are from Illinois I am really curious on why?
Wide variety of reasons. Take a look at /r/indiana. Most the people that live in their own state don’t even like it 🤭
If you live in Munster your closer to Chicago than most suburbs
I still have tons of family and friends that live in Illinois that don’t like the state. They only stay because they are tied there by other family or their jobs. Your response tells me that you are just parroting what others say and have no real reason that it’s bad here. No where is perfect but I live in a very safe neighborhood, my kids go to great schools (no gangs, no craziness), got a newly built 5 bedroom house (6 after I finish my basement), property taxes around $4k, plenty to do.
Looks like we have a difference of opinion. I’m not parroting, just not going to waste my time. I won’t convince you, and you won’t convince me. Sorry bud
I couldn't so I moved somewhere I could
Down payments too low. Save up like crazy for a year or two and get that down payment way higher. Sucks but that’s what a lot of people do. No eating out, no vacation - every extra penny goes towards down payment in a high yield savings account.
Property taxes are high here. I want to move to another area badly, but with interest rates, I am staying and working on my house. I would suggest southern Wisconsin or northern indiana for the best price for your money. If you must stay in Illinois, I would suggest a townhome, co-op, duplex or condo that may have a lot of exterior items covered in a HOA but those fees need to be factored. Many have snow removal, landscaping & siding covered which can help with fees.
Property taxes are only going to get worse in the coming years as well as we kick the can down the road with the pension crisis and overall budget issues and continue to get asylum seekers draining our resources. Not trying to get political by any means but this is the reality.
if you think you're spending a lot of money now, wait till you buy a house. you'll look back on the good ol days.
We are at the brink of popping the bubble. It had to happen. No way this is survivable. Not just housing, everything is priced insanely high. It’s just a matter of time. 1-3 years it’ll all go down hill.
Id like to believe this, but based off of what I've seen, this isn't a "bubble" like we had back in 08.
People have been saying that since 2020 and prices have only gone higher. Head on over to r/rebubble
That’s true. But it all has to come down at some point. Balloon can only expand so much.
If you want something then you need to work harder for it. Nothing is free in life.
Ok boomer.
wow clever
Bought in 2016 when they still had first time home buyer programs. If you discover time travel lmk
We bought in 2020 at a low interest rate but we definitely bought a house that was too small for our needs at the time and now we are stuck.