Home Ownership: Considering a Move to a Lower Cost of Living Area?

The real costs of home ownership explained

Over the past decade, the average age for first-time homeowners in the United States has fluctuated between 30 to 32 years, influenced by economic conditions (Economists Outlook). It’s likely that regional differences also play a role, as the cost of buying a home in rural Iowa significantly undercuts that of acquiring property in the suburbs of major cities like Chicago or New York City.

My husband and I are notably above the typical age for first-time homeowners. We are now earnest coming to terms with the local housing market, conveniently situated in a suburban area not far from downtown Chicago.

It’s All About Location

In our search, the most affordable homes start at $375,000. These are either modest two-bedroom homes too small for our family of five or outdated properties that haven’t seen renovations since the ’60s or ’70s—imagine a kitchen with a yellow rotary phone still on the wall.

Move-in ready homes are starkly out of our budget, priced between $550,000 and $800,000. Additionally, property taxes for even the most modest home start at $10,000 annually, with many reaching $15,000 to $20,000.

The thought of saving up $75,000 for a 20% down payment on a fixer-upper, not to mention coping with $1,000 a month in property taxes for decades, is daunting.

Income vs. Cost of Living

We’re somewhat priced out of the market because my husband is currently in a post-doctoral position. We’re hopeful that in two years, once he secures a tenure track position, his income will significantly increase. While salaries are higher in high-cost living areas, the difference is barely noticeable when considering the steep local property taxes.

Beyond taxes, we also face higher costs for housing, gas, food, and other essentials.

Tied to Our Location?

Having spent the past 13 years in this region—where my husband completed his Master’s and Ph.D., and now his post-doc—we are deeply rooted here. Our children have never known another home.

Yet, we find ourselves questioning whether our ties to the area justify the financial sacrifices. Living here could severely impact our financial security and retirement savings.

We’re now contemplating not just moving to a more affordable suburb but possibly leaving the Chicago area altogether. A mere three-hour drive could dramatically change our living situation. We could potentially purchase our dream home for under $200,000 and pay less than $5,000 in annual property taxes.

Is making such a move worth it? I believe it is.

Have you ever made a significant move to live more affordably? What was your experience?

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