While the number of renters now outpaces homeowners — with about one-third of the country’s population living in rentals — 2017 saw the first year of a slight decline in renting households since 2004, according to a recent report from Harvard University’s Joint Center for Housing Studies.
In its annual rent report, ABODO found that despite a slight dip in the number of renters, rent prices increased across the country this year, with the national median rent for one-bedroom units increasing by 2.4 percent. Two-bedroom rentals were 3 percent higher by the end of 2017 than they were in the beginning.
Chicago’s average monthly rent still continues to be the eighth highest in the nation, but that number is steadily falling now that the new year has arrived. On average, one-bedroom rent fell slightly by 0.08 percent in 2017, leveling out at $1,805 by the end of the year and already seeing gradual decreases since the start of 2018. Average two-bedroom rent, however, rose 0.52 percent over the course of 2017, but has started seeing a slight dip in median rent costs.
Including the District of Columbia, 28 states saw their rental prices increase over the course of 2017. Illinois as a whole saw an average rental price of $924 across the state.
As renter population across the country, and Chicago, starts to decrease, homeownership rates should rise. Many experts say that two main groups of people will drive the market in 2018 – Millennials and Minorities. Millennials are starting to get to an age where they can consider getting financing for a home.
On the other hand, Minorities are often seeking non-traditional financing methods, perhaps a contract for deed method which has been made very popular by Minnesota residents. As more Minorities and Millennials seek non-traditional financing throughout Chicago, homeownership rates could increase in 2018.
New programs become available, with flexible terms, such as:
•Minimum down payments of 3 percent or even 1 percent, sometimes without monthly mortgage insurance premium charges.
•Debt-to-income levels that stretch as high as 45 to 50 percent.
•Looser definitions of what qualifies as income.
•Underwriting flexibility that acknowledges that growing numbers of Americans live with extended families and have multiple resident earners who can contribute to household expenses.
With great terms and flexibility like above, prospective buyers should finally be rejoicing in the city of Chicago.