Three Things Buyers Can Do in Today’s Housing Market
It’s clear the 2022 housing market has been defined by rising mortgage rates. With rates on the rise, it has become more costly to purchase a home. According to the National Association of Realtors (NAR):
“Compared to one year ago, the monthly mortgage payment rose to $1,944 from $1,265.”
This is an increase of nearly 54% - that’s a massive increase for a monthly mortgage payment! If you’re thinking of buying a home in Chicagoland, it may be causing you to consider putting your plans for homeownership on pause. This rate hike is making homes less affordable, especially compared to the historic lows we saw over the last few years.
The good news is we are here to help you navigate today’s housing market and this rising rate environment. Here are three key things to consider when buying a home with higher-than-normal interest rates:
1. Expand Your Search Area and Criteria
If you’ve been looking for a home in the city center or a specific area in the Chicago suburbs that’s starting to feel like a stretch for your budget, you may want to try looking a little further away for a location that could be more affordable. Expanding your search location or re-prioritizing the items on your must-have list can open up opportunities you may not have yet considered, and that will help you afford more of what you’re looking for in a home. As CNET shares:
“Area growth is likely to keep pace with the market, which means that the outskirts of town might be hopping within five years. Consider stepping out of your ideal location by searching in the nearby cities. You may find better prices and more square footage.”
2. Explore Alternative Financing Options
Working with a trusted lender to learn about the different loan types and options is essential too. There are various mortgage options available with different down payment and eligibility options and requirements.
Your trusted Chicagoland real estate experts will help point you in the right direction when it comes to exploring creative ways to find the best home loan and location for your situation. With rising mortgage rates making it more costly to finance a home today, your loan officer may introduce you to an ideal option that you have not yet considered. This could make a home purchase more affordable and within your financial reach over the life of your loan.
3. Consider Grants, Gift Funds, and Down Payment Assistance
There are many options available when it comes to securing the funding you need to purchase a home. Searching for specific down payment assistance options available in your local community could be a game changer when it comes to taking your first step toward homeownership. NAR shares:
“Many local governments and non-profit organizations offer down-payment assistance grants and loans, targeted to area borrowers and often with specific borrower requirements.”
Plus, there are programs and special benefits for individuals working in certain professions or with unique statuses, including teachers, doctors and nurses, and veterans.
Ultimately, that means there are many federal, state, and local programs available for you to explore. The best way to do that is to connect with a local Chicagoland real estate professional and your lender to learn more about what’s available in your area.
The Bottom Line
If you’ve been searching for a home in the Chicagoland area and have found yourself considering stepping away from the process because you’re worried about rising costs, let’s connect. Having a team of local advisors on your side may be just what you need to guide your search in a new, and more affordable, direction.