Fair market rent prices for three-bedroom properties in Illinois are projected to rise 4.2 percent in 2017 over last year, according to a recent study. (Photo courtesy of IHDA)

In an effort to see if owning a home costs more than renting, a report found both are quickly becoming unaffordable in Illinois.

A report by housing data company Attom Data Solutions found that 71 percent of Illinois counties have home prices rising faster than average wage growth.

In its report about whether buying or renting a home was more affordable, Attom economist Daren Blomquist stated that most of the counties surveyed require more than 30 percent of the average income to rent the average apartment.

Additionally, more than half of the counties require more than 30 percent of the average income to pay for a home. Financially, the traditional philosophy dictates that one should never pay more than 30 percent of one’s income to housing costs.

“Because of the low homeownership rates that we’ve seen during this housing recovery, there’s still a lot of demand for rentals and that’s keeping rental rates high,” Attom economist Daren Blomquist said.

The problem centers on seven of the same 13 counties still requiring more than 30 percent of the average resident’s income to buy a home.

“The real issue is that home prices are rising faster than wages,” Blomquist said. “That’s creating less and less affordability.”

According to the report, fair market rent prices for three-bedroom properties in 2017 are rising 4.2 percent compared to 2016, while median home prices in 2016 were up 5.7 percent from the year before.

Average wages are up 2.2 percent from a year ago in the second quarter of 2016.

Blomquist warns that unaffordable homes contributed to the last housing crisis.

“What we saw last time affordability became an issue about 10 years ago was the use of ‘creative loans’ to allow people to afford more than they actually could,” he said.

According to Blomquist, 79 percent of counties nationwide have home prices rising faster than average wage growth.

— Costs for renting and owning homes expected to rise in 2017  —