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Rent-vs.-buy debate tilting toward owning in Chicago

This is a great time to buy a home. Housing prices in Chicago, even in top neighborhoods such as Lincoln Park, Lincoln Square and Lakeview, are still affordable. Mortgage interest rates are near historic lows, making it more affordable than ever to take out a mortgage loan.

Then there’s one more factor that makes buying a condominium or single-family home in Chicago a wise move: Apartment rents in the city continue to rise.

The Chicago Tribune recently reported on the shortage of apartment units available for rent in downtown Chicago. According to the story, this shortage, and the continued demand from potential renters have worked together to keep apartment rents in downtown Chicago on the rise.

The Tribune reported that in the final months of 2012, more than 10 buildings in downtown Chicago boasted average rents of at least $2.80 a square foot. Quoting the research firm Appraisal Research Counselors, the Tribune added that this figure is up 8.5 percent from a year earlier.

And renters hoping for rents to move the other way received some bad news: According to the Tribune, even though construction crews are building new apartments in the city, the demand for units is high enough to keep rental rates from dipping.

In other words, renting an apartment in Chicago is set to be an expensive proposition for a long time.

Buying a home, though, is becoming more affordable. A recent study by the National Association of REALTORS® found that homes have never been more affordable to as much of the U.S. population as they are now.

The message, then, is clear: If you’re debating the wisdom of buying a home versus renting on a purely financial basis, buying, in a market like Chicago’s, wins out.

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