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Buying a home in Chicago, Illinois

PublishedOct 14, 2024|Time to read min

    Quick insights

    • Chicago is a vibrant and ever-growing city with a wide selection of residential homes, gainful employment, good schools and diverse communities.
    • Buses, city trains, the Metra, taxis, Ubers and bike sharing programs are convenient ways to commute to work and navigate throughout the city.
    • Many neighborhoods in Chicago are culturally and ethnically diverse, creating an inclusive and welcoming environment for people from all backgrounds.

    Living in the City of Chicago

    When you think of Chicago, what comes to mind? Perhaps the picturesque skyline, inviting and diverse neighborhoods or stunning architecture. Whether you’re looking to move to a larger metro area or hoping to raise a family within proximity to your job, Chicago may be a great option for you to consider.

    Chicago is full of different neighborhoods including Lakeview, Little Village, Hyde Park and Bronzeville, just to name a few. The city is home to must-see attractions such as the Chicago riverwalk, Millennium Park, Adler Planetarium, Field Museum and more. Chicago is a prime location for people with various lifestyles like working professionals, couples, families and students. In this guide, we will give you the home buying resources and information you need before making the move to the Windy City.

    Living in downtown Chicago

    One of the best parts about living in downtown Chicago is the proximity to major employers, access to parks and countless restaurants to grab dinner with your friends. There is a variety of things for you to do in the city such as:

    • Heading to the lakefront for a nighttime walk or spin on your bike
    • Visiting Lincoln Park Zoo with your family

    A drawback to living in downtown Chicago is the higher cost of living and limited space. You can find many upscale, high-rise buildings or single-family homes, but you may be giving up space for location.

    Factors to consider when buying a home in Chicago

    According to the University of Chicago, there are over 200 distinct neighborhoods that make up the 77 community areas in Chicagobuying-a-home-in-chicago-uchicago. Location, proximity to amenities, employment opportunities and schooling are important factors to consider. For instance, a family with school-aged children may focus on finding a good school for their kids to attend. There are many school districts, private schools and public schools with top educators in Chicago. Chicago is home to numerous Fortune 500 companies providing working professionals with an abundance of opportunities in industries from finance and healthcare to manufacturing and retail.

    Down payment programs and financing homeownership

    The city, county and state provide flexible and affordable financing options to help cover your down payment and closing costs. The different homebuyer assistance programs include:

    Down payment programs can speed up your path to homeownership and save you some of the upfront expenses associated with buying a home. You can increase your savings to put more money down on your home and work on improving your credit score.

    Styles of homes to buy in Chicago

    Chicago's unique residential architecture includes some of the most classic styles of homes in the Windy City such as Victorian, Bungalow, Two-Flats, Greystones and modern high-rises. From cozy starter homes to luxurious floor-to-ceiling lakefront condos, there is something for every new homebuyer.

    The different types of homes are single-family houses, condos, courtyard apartments, townhouses and multifamily properties. The type of home you want will depend on your lifestyle preferences, square footage and future maintenance responsibilities. You can find a home by using real estate websites and working with a real estate agent.

    Pros and cons of living in Chicago

    As you conduct research to find a comfortable place you can call home, consider the pros and cons of living in a large metropolitan area like Chicago. The biggest advantages of living in the city include:

    • Robust job market: While Chicago's job market is subject to macroeconomic factors just like the rest of the country, typically there are many opportunities for you to grow your career at a Fortune 500 company, local business or even a startup.
    • Public transit: The transit system provides train and bus services throughout Chicago and neighboring suburban areas. There is ample access to taxis, Ubers and bike-sharing programs.
    • Lake Michigan and nearby beaches: With the Chicago River and Lake Michigan close by, there are plenty of aquatic activities to partake in such as kayaking or booking a dinner cruise.
    • Endless entertainment: There’s no shortage of fun and exciting events in Chicago. You can catch a Cub's game at Wrigley Field, check out Lollapalooza every summer or visit a museum.

    A few potential disadvantages of living in Chicago are as follows:

    • Cold winters: You will likely experience all four seasons, including warm summer months and cold winter temperatures. While the reputation may be worse than the reality, it's still something for new homebuyers to consider.
    • Taxes: Chicago has a higher sales tax and property tax rate compared to other parts of the country.
    • Traffic congestion: Congestion remains a problem with the construction of new highways and lane closures.

    Average cost of living in Chicago

    According to RentCafe, as of 2024, the cost of living in Chicago is 24% higher than the state average and 14% higher than the national averagebuying-a-home-in-chicago-rentcafe. Housing, transportation, groceries and utilities will vary depending on the size of your home, location, local amenities and a few other factors. With an above-average cost of living, you can modify your budget and incorporate cost-saving strategies, such as:

    • Creating an effective budget, contributing to your savings and tracking expenses
    • Ditching your car and buying a monthly pass to use the buses and L-train
    • Taking advantage of budget-friendly activities

    Housing costs are typically cheaper in Chicago compared to other coastal cities like New York City and San Francisco.

    Cost of living in Chicago vs. New York City

    Chicago and New York share many characteristics such as world-class museums and lively restaurant scenes. However, there is one city that offers more bang for your buck: Chicago. Although the cost of living in Chicago is higher than the national average, New York City is more expensive. Housing costs, transportation expenses, tax rates and overall affordability are cheaper in Chicago compared to New York City.

    The pros of living in Chicago are being within walking distance to Lake Michigan, lower housing costs, thriving job market, various cultural activities, plentiful access to healthcare and vibrant communities. The cons are freezing temperatures during the winter months, traffic delays and air pollution concerns.

    The pros of living in New York City are the many employment opportunities and thriving economic industries, endless entertainment, 24-hour public transit system and diversity. Some of the cons of living in New York City include exorbitant housing prices, noise complaints, traffic and limited living space.

    Average home price in Chicago

    Chicago’s low inventory and fierce buyer competition continue to exert pressure on the local housing market. According to Rocket Homes, as of May 2024, a two-bedroom home sold for approximately $347,000buying-a-home-in-chicago-rockethomes. Home prices continue to increase in the Chicago real estate market and suburban Cook County. Many factors influence home prices including location, size and condition of the home, property taxes and whether it is a seller's market or buyer's market.

    The property tax rates for Cook County vary depending on your location. According to the Cook County Treasurer’s Office, property taxes increased more than $909 million in 2023buying-a-home-in-chicago-countytreasurer. According to US News, homeowners' insurance costs average between $1,400-$2,600 annually in Chicagobuying-a-home-in-chicago-usnews.

    In summary

    Chicago is a nice destination for homebuyers looking to live in a large-sized city with a bounty of job opportunities, excellent higher-education programs, cultural offerings and delectable bites.

    As a first-time homebuyer, it’s important to prepare all your documentation for the mortgage approval process. Start with the essentials like improving your credit score, saving for a down payment, getting preapproved, attending open houses and conducting thorough inspections. Buying a home is a major decision and monumental step, so enjoy the journey.

    Take the first step and get preapproved.

    Have questions? Connect with a home lending expert today!

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