Rent or Buy: Chicago's Millennials Have a Tough Choice
By Lily Corral, Medill School of Journalism, Northwestern University
Millennial Chicago residents have had a tough time choosing between apartment living and buying a home, caught between rising apartment rent and a lack of employment opportunities.
Chicago is the sixth most expensive apartment rental market in the country according to a report published by Zumper this month. Rent for a one-bedroom apartment increased an average of 5.6 percent over the last month alone, the biggest monthly increase across the top 50 largest U.S. cities.
Across the nation millennials are the largest group of all homebuyers at 32 percent, according to the National Association of Realtors. The same demographic was second to the Generation X buyers just two years ago. The increase in home ownership for younger buyers may grow in Chicago, but at a gradual pace.
“Chicago can be pretty expensive and paying rent is no different,” Matt List, 41, a real estate agent with Mark Allen Realty said. “I think because of this I’ve had more clients in the younger demographic buying homes this year but I wouldn’t say it’s been a massive change.”
The inflated rent market is not the only factor millennials will need to consider.
“I just don’t see myself jumping into the housing market anytime in the near future,” Molly Robinson, 25, a resident of Uptown said. “I work at a coffee shop and I’m a musician on the side and neither one are financially stable.”
Chicago’s unemployment rate of 5.8 percent ranked ninth highest among major metropolitan areas according to data published by the Bureau of Labor and Statistics. Nationally, people between the ages of 20 to 24 experienced an unemployment rate of 9.9 percent and 5.6 percent for ages 25 to 34.
“I think the biggest problem for younger people wanting to buy their first home is the unemployment level,” Michael Michalak, 41, a real estate agent with RE/MAX said. “They’re graduating college and finding jobs as servers and that’s just not going to lead them to buying a home.”
The rental market does not play in the resident’s favor and neither does the housing market. Chicago’s housing market is currently a seller’s market. Millennials will need to choose between inflated rent prices and overpriced homes.
“I’m showing a house that already has three offers on it and it was just listed yesterday,” Michalak said. “Supply is very tight and if younger clients want a house they’re probably going to be paying well above asking price.”