Chicago Area Homes Becoming Less Affordable!

Every quarter, the National Association of Home Builders, in conjunction with Wells Fargo, calculates the “home affordability index”.  The index calculates the median income of families in a given area, and compares it with the median home price in that same area.

For example, for the third quarter of 2013, the home affordability increase for the Chicago area calculated a $73,400 median income and a $210,000 median home price.  Based on these figures, only approximately 64% of homes sold in the Chicago area were affordable to families earning the median income.  Interestingly enough, in the second quarter of 2013, nearly 71% of Chicago area homes were affordable to the median-income buyer.  The latest figures represent quite a drop just over the last three months.

What’s causing this drop?  Well, most probably it’s rising home prices and increased interest rates.  Home prices are increasing faster than wages do.  Although the winter months are usually the slowest in the real estate market, this year prices are expected to continue to increase regardless.  If you’re in the market to buy, don’t dawdle!