Rising rents might have you asking yourself if it makes more sense to buy a home. While it’s a complicated calculation with no one-size-fits-all solution, a new report from Attom Data Solutions found that it’s still more affordable to rent than buy in Cook County.
An individual earning the county’s average income of $65,000 would drop 32 percent of their income to cover the $1,734 monthly rent for an average three-bedroom. The same earner would need to spend roughly 37 percent of income to cover the costs associated with buying a home at the city’s median sale price of $245,000.
The Attom report also listed the Chicago area among 43 percent of the counties where average rents grew at a faster pace than average wages—which is not an ideal recipe for affordability. Rents for a three-bedroom home in Chicago also increased faster than home prices.
In other words, while it’s generally still cheaper to rent than buy, Cook County renters are feeling more squeeze relative to buyers. The report found that renting is also generally cheaper than buying in neighboring suburban Will, Kane, DuPage, and Lake counties.
The Chicago area was still far more affordable than some coastal metropolitan counties near cities like New York and San Francisco, where Attom found that an average earner would need to spend in many cases more than 60 percent of income on rent.
Still, an average Cook County renter and buyer would find themselves cost-burdened by renting an average three-bedroom rental or buying a median-priced home. Burdened is defined as spending 30 percent or more of income on housing.
Harvard researchers found that nearly half of the nation’s renters were cost-burdened in 2016, compared to 20 percent in 1960. And nearly two-thirds of renters nationwide say they can’t afford the downpayment to buy a home.
The nationwide housing crisis hasn’t spared Chicago, where the demand for affordable housing outpaces supply. The city recently adopted a number of measures to address the issue including the reinstatement of the city’s Department of Housing and the creation of an affordable housing task force to explore potential policy solutions.