For big-city energy in the Midwest, Chicago has you covered. Whether you want to check out a show at one of the city’s 250+ music venues, explore the latest exhibit at the renowned Art Institute or head to the West Loop to sample some of the city’s most famous dining destinations, living in the Windy City means riding on a gust of culture and cool.

And there’s good news for house-hunters: The Chicago housing market is very affordable compared to other major cities. The median price of a home within the city limits was $334,000 as of March 2023, according to data from Illinois Realtors, and in the greater metro area it was $310,000. Both are comfortably below the nationwide median price of $375,700. Read on for everything you need to know about buying a home in Chicago.

Deciding where to live in Chicago

The city of Chicago is massive, spanning 234 square miles and 77 neighborhoods, all of which have a different vibe — and a different price point. Your homebuying budget will get you a much different kind of place in River North than in Rogers Park. Don’t forget the suburbs, either: The Chicago metro area includes Evanston, Naperville, Arlington Heights and loads of other options a bit farther from downtown.

No matter where you’re thinking about buying, it’s important to factor in how much you’ll need to cover all your other essentials, like transportation, utilities and food. If you’re moving from somewhere else in the Midwest, be prepared for a bigger day-to-day budget: The cost of living here is around 30 percent higher than in Indianapolis, for example, and 23 percent higher than in Minneapolis.

How to buy a house in Chicago

Save for a down payment

In early 2022, the typical down payment in the Windy City was $29,000, according to data from Crain’s Chicago Business. However, the amount of cash you need to buy a home depends largely on the home’s price and the type of loan you’re planning to use to finance the purchase. If you have excellent credit, you may be able to put down as little as 3 percent of the purchase price with a conventional loan. On a median-priced $334,000 property, that adds up to just a hair over $10,000.

Make sure you’ve got enough to cover a range of closing costs, too. For example, in the city of Chicago, the buyer pays a transfer tax of $7.50 for every $1,000 of value. On a median-priced property, that’s another $2,505.

Get preapproved for a mortgage

No matter how much you think you can spend on a home, it’s ultimately up to a lender to decide how much they’re willing to loan you. Before you start house-hunting, it’s crucial to get preapproved for a mortgage. It’s a simple process that involves handing over your financial information — pay stubs, tax returns, bank account balances and more — to a lender for a preliminary review. Sellers will take your offer more seriously if you have a preapproval letter in hand.

Find the right lender

The lender that issues your preapproval doesn’t have to be the same one that actually loans you the cash for a home in Chicago. It’s important to compare multiple lenders to see who can offer you a mix of the best rates and lowest fees. Start your search with a wide-ranging list of lenders in Illinois, and ask your current bank if they offer any rate discounts to existing customers.

Find the best local real estate agent in Chicago

Since Chicago is so huge, a knowledgeable local real estate agent can make a big difference in helping you narrow your search. After all, you don’t have time to attend open houses from Woodlawn to West Ridge. An agent will listen to what you’re looking for in a new home and point you toward specific neighborhoods and listings that offer what you need — or at least most of it — for a price that fits your budget.

Start house-hunting and make an offer

The house-hunting process begins by asking yourself a lot of questions. Do you need a detached home, or will a condo or townhouse work for you? How far are you willing to commute to work each day? Do you prefer a walkable neighborhood, or are you OK with being a bit further from nightlife and dining? Consider your future needs, too, especially if you’re planning to start a family within the next few years.

Once you find a place you love, work with your agent to craft an offer that will catch the seller’s attention. You might not need to rush — homes in Chicago have been spending 65 days on the market before selling, according to Redfin data. Plus, while the market here got fairly hot in the peak of the pandemic, it has calmed down since then. More than 14 percent of sellers in March dropped their prices before making a deal, and homes these days tend to sell for just under asking price (as opposed to way over).

Get a home inspection and appraisal

Once your offer is accepted and you sign a purchase agreement, there’s still some work left to do. It’s time to get the place inspected and appraised.

While a home inspection isn’t a requirement, it’s definitely a wise move. It helps you feel secure about your investment, and if you find an issue with the home, you might be able to negotiate getting the seller to pay for repairs. In fact, 43.6 percent of Chicago sellers agreed to concessions in the early part of 2023, according to Redfin.

If you’re financing your purchase with a mortgage, an appraisal will not be optional. Your lender needs to verify that the price you have agreed to pay is an accurate reflection of its market value.

Requirements to buy a house in Chicago

Can I afford a house in Chicago?

As you determine how much house you can afford in the Windy City, it’s important to recognize that a Chicago home can include a wide range of properties, from affordable one-bedroom condos in Uptown to multi-million-dollar mansions in Lincoln Park. So think carefully about how much you can contribute to a down payment, what other debts you have and what current mortgage rates will mean for your monthly payments.

It’s also critical to make sure your credit score is in good shape. The higher your score, the lower your mortgage rate will be, which can translate to serious savings. Consider this breakdown: With a 6.5 percent rate on a 30-year loan for a $312,500 property, with a 20 percent down payment, your monthly principal and interest payment would be $1,580. With a 7.5 percent interest rate, that payment would jump to $1,748.

First-time homebuyers in Chicago

If you’re a first-time homebuyer, you may be able to get some assistance from one of the Illinois Housing Development Authority’s programs. These are designed to help low- and moderate-income buyers, so you’ll need to meet income and purchase price limits. Those eligible may be able to get some much-needed financial assistance with the down payment and closing costs.

Even if this isn’t your first time buying a home, you might want to explore the Chicago MMRP – Micro Market Recovery Program. This aims to help reinvigorate certain distressed neighborhoods by offering buyers up to $15,000 in down payment assistance. Many of these neighborhoods are pretty rough, but the program also includes some up-and-coming areas that have already been developing, including Hermosa and Humboldt Park.

Closing day

Buying a home is a long process, and the final piece of the puzzle is the closing. You’ll have three main responsibilities for this:

  • First, schedule a final walk-through to make sure the property is in the condition that you have been promised.
  • Second, be prepared to sign a lot of paperwork — there will be many, many signatures and initials required.
  • And third, get ready to hand over a check for your closing costs. You’ll know the final tab in advance via your closing disclosure. Data from ClosingCorp shows that Illinois closing costs are typically around 2 percent of the purchase price, not including lender fees.

Once it’s all over, you’ll get the keys to your new home and be ready to sing along to “Sweet Home Chicago.”


  • The median sale price on a Chicago home is $334,000, according to Illinois Realtors. Use Bankrate’s mortgage calculator to get a sense of how different down payment amounts and mortgage rates will impact your monthly payments on a home of around that price. Most experts advise spending no more than 28 percent of your income on housing, so aim for a monthly payment that comes to 28 percent or less than your monthly gross income.
  • The Windy City can be a great place to call home. It’s a major business center with loads of opportunities for young professionals, and while the winters can be tough, the summers by Lake Michigan make that cold worth it. In addition, the city is significantly cheaper than coastal hubs like New York and Los Angeles — in fact, the median home price in Chicago is more than $40,000 less than the nationwide median.