About Advertise Archive Contact Search Subscribe
Serving the Loop and Near North neighborhoods of downtown Chicago
Facebook X Vimeo RSS
The Home Front

7-Jun-24 – Would-be first-time home buyers in Chicago this spring are in a vice grip between ever higher apartment rents and mortgage interest rate creep.

Rents in Chicago continue to rise because of soaring real estate taxes and higher operating expenses that must be passed on by landlords. However, many apartment dwellers say they are tired of collecting rent receipts while stuck in apartment jail, and desperately want to buy that first home or condominium.

Meanwhile, benchmark 30-year mortgage rates once again have inched north of 7 percent, more than double the level of two years ago. On May 30, Freddie Mac’s Primary Mortgage Market Survey reported that 30-year loans averaged 7.03 percent nationwide, up from 6.94 percent a week earlier. A year ago, 30-year fixed loans averaged 6.79 percent.

Sam Khater

“Following several weeks of decline, mortgage rates changed course last week,” said Sam Khater (left), Freddie Mac’s Chief Economist. “More hawkish commentary about inflation and tepid demand for longer-dated Treasury auctions caused market yields to rise across the board.”

Khater said this reality, as well as economic signals that have moved sideways over the last few weeks, “have resulted in mortgage rates drifting higher as markets continue to dial back expectations of interest rate cuts.”

The Freddie Mac survey also reported that 15-year fixed mortgages averaged 6.36 percent, up from 6.24 percent a week earlier. A year ago, the 15-year fixed loan averaged 6.18 percent.

Freddie Mac

The survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who place a 20 percent down payment and have excellent credit.

Rents on an elevator going up

Downtown and Near North Side Chicago’s luxury apartment rents are on an upward elevator ride. Rents for top-tier apartments rose 3 percent year-over-year, pushing the average monthly rent for a downtown Class A apartment above $3,100 for the first time ever, reported Luxury Living Chicago, a high-end rental apartment-leasing firm.

The posh Streeterville neighborhood posted the highest average rents at $3,454, trailed closely by Gold Coast and Old Town at $3,445, and River North at $3,426, according to the report.

(Right) A three-bedroom, three-bathroom penthouse unit in Streeterville featured on Luxury Living’s website. The unit is available for rent for $7,380 per month.

Luxury Living

Re-assessing West Town and Rogers Park

On May 20, Cook County Assessor Fritz Kaegi released the initial assessments on residential and commercial properties in West Chicago Township, showing a 27 percent jump in total assessed value over the past three years.

Median multi-family apartment values have soared 20 percent in the township since 2021, the assessor reported. West Chicago Township has 7,168 commercial multi-family properties containing more than four units.

In Chicago and Cook County, commercial properties are assessed at a whopping 25 percent of market value, while single-family homes and small apartment buildings are assessed at 10 percent of market value.

Photo provided by Don DeBat

The boundaries of West Chicago Township are west of the Chicago River on the east, North Avenue on the north, Pershing Road (39th Street) on the south, and Harlem Avenue on the west.

Experts say apartment dwellers in the hot West Town neighborhoods of Austin, Bucktown, East and West Garfield Park, Humboldt Park, North and South Lawndale, and Wicker Park should expect hefty rent increases this year.

“I strongly encourage property owners to review their reassessment notice to ensure their property characteristics and market value reflect their home,” said Kaegi (right).

Fritz Kaegi

In early April, The Home Front reported that apartment renters in the Rogers Park neighborhood should brace themselves for hefty spring and summer 2024 rent increases as a result of the lofty property tax reassessment numbers released by the Cook County Assessor.

The 2024 assessed values of large multifamily apartment properties grew to $213.04 million (before appeals), up an exorbitant 46 percent from $145.63 million in 2023, reported Assessor Kaegi.

In Rogers Park, large multifamily apartments drove a significant increase in assessed value in the township, he said.

Rogers Park Township is bounded roughly by Lake Michigan on the east, Howard Street on the north, Ridge Avenue on the west, and Devon Avenue on the south. It includes about 800 commercial apartment buildings containing more than four units.

Experts say financially squeezed owners of both walk-ups and large mid-rise and high-rise apartment buildings in Rogers Park and other North Side neighborhoods likely will receive substantial property tax increases if they do not appeal the assessment hikes.