Emily Kordick Real Estate

This is a question I hear often, especially from first-time buyers who are trying to make sense of affordability in the Chicago suburbs. The “3-3-3 rule” is a simple guideline meant to help buyers think through whether purchasing a home is financially realistic, but like most rules of thumb, it works best when paired with local context.

The 3-3-3 rule suggests three basic benchmarks. First, a buyer should plan to put about 3 percent down. Second, total housing costs should stay around 33 percent of gross monthly income. Third, a buyer should expect to remain in the home for at least three years. On paper, this can be a helpful starting point, but in the northwest suburbs of Chicago, it needs a bit of adjustment.

Down payment expectations are a good example. While some loan programs allow for 3 percent down, many buyers here choose to put more down if they can, especially in competitive areas like Arlington Heights, Mount Prospect, and Barrington. A higher down payment can strengthen an offer, reduce monthly payments, and help offset higher property taxes, which are a real factor in Chicagoland. That said, putting 3 percent down can still be a reasonable option for buyers who prioritize getting into the market sooner and plan to stay long-term.

The second part of the rule, keeping housing costs around a third of income, is where local nuance really matters. In the northwest suburbs, property taxes, insurance, and commuting costs vary significantly by town. Two homes with the same purchase price can have very different monthly payments depending on tax rates or HOA fees. This is why I encourage buyers to focus less on a rigid percentage and more on their actual comfort level month to month. What feels manageable for one household may feel stressful for another, even at the same income level.

The final “three,” staying in the home for at least three years, is particularly important in our market. Buying and selling costs are real, and short-term ownership can make it harder to build equity, especially if the market softens. Buyers who plan to stay longer often have more flexibility and less pressure to time the market perfectly.

The 3-3-3 rule is not a guarantee or a requirement. It is simply a framework to help start thoughtful conversations. In the northwest suburbs, successful home buying decisions tend to come from understanding local taxes, neighborhoods, and long-term plans, not from following a national rule exactly. When buyers take the time to look at the full picture, the decision becomes much clearer and far more personal.