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Illinois Housing Market: Trends and Forecast 2025-2026

July 26, 2025 by Marco Santarelli

Are you thinking about buying or selling a home in Illinois? If so, it's crucial to understand the current Illinois housing market trends. Here's the scoop: The Illinois housing market is currently showing signs of stabilization with median prices rising. While sales are slightly down compared to last year, inventory is increasing, presenting both opportunities and challenges for buyers and sellers. Let’s dive deeper into what’s happening and what it means for you.

Illinois Housing Market Trends in 2025:

Home Sales

How are home sales doing in Illinois?

As reported by Illinois REALTORS®, in May 2025, closed sales in Illinois totaled 12,674, a 4.7% decrease compared to May 2024 when there were 13,300 closed sales.

Metric	May 2024	May 2025	Percent Change
Closed Sales	13,300	12,674	-4.7%
Previous Month's Closed Sales	11,711	11,467	-2.1%

It's important to note that while sales have dipped slightly year-over-year, they are a key indicator of market activity. Remember that real estate market activity can vary across different locations in Illinois, so consider getting in touch with a local Realtor to get more information.

Comparison with National Home Sales in the U.S. in June 2025

Nationally, existing-home sales are also showing some fluctuation.

There was a 2.7% decrease in total existing-home sales month-over-month, reaching a seasonally adjusted annual rate of 3.93 million.
However, there's no change in sales year-over-year, according to the National Association of REALTORS® (NAR).

The Illinois market's dip in closed sales is relatively in line with some of the national trends, suggesting that broader economic factors are at play.

Home Prices

Are Home Prices Dropping?

No, home prices in Illinois are not dropping. In fact, they're going up! The median sales price in Illinois for May 2025 was $315,000, which is a 5.0% increase compared to $300,000 in May 2024.

Comparison with Current National Median Price in the U.S.

The national median home price tells another story. As of June 2025, the national median price is $435,300, reflecting a 2% year-over-year increase. This is also a record high for the month of June. So while Illinois prices are rising, they are still below the national median, making Illinois relatively affordable compared to some other states.

From my experience, I see that there is a lot of competition and bidding wars among home buyers, especially for properties that are priced right and in great locations.

Housing Supply

Is It a Buyer's or Seller's Housing Market?

The inventory of homes for sale in Illinois is increasing. In May 2025, there were 19,890 homes on the market, a 6.0% increase from the 18,758 homes available in May 2024. While an increase in inventory is a good sign for buyers, we still need to see how this trend plays out over the next few months.

Days on Market: Homes are staying on the market slightly longer. In May 2025, the average days on market until sale was 27 days, compared to 26 days in May 2024, a 3.8% increase. This could indicate that buyers have slightly more negotiating power.

Whether it's a buyer's or seller's market can depend on different conditions, so it's best to check with your local Realtor.

Market Trends

Impact of High Mortgage Rates

One of the biggest factors influencing the housing market is mortgage rates. As of July 17, 2025, the average 30-year fixed mortgage rate is around 6.75%, and the 15-year fixed-rate mortgage is about 5.92%, according to Freddie Mac's Primary Mortgage Market Survey®.

30-Year Fixed Rate: Around 6.75%
15-Year Fixed Rate: About 5.92%

These rates have a direct impact on affordability and buyer demand. High rates can deter potential buyers, leading to a cooling effect on the market. According to various forecasts, the 30-year FRM rate will likely end 2025 between 6.0% and 6.5%. The stability in mortgage rates may encourage some prospective buyers to enter the market.

Additional Factors Influencing the Illinois Housing Market

Economic Conditions: Illinois's overall economy, including job growth and unemployment rates, plays a significant role in housing market stability. Strong job markets tend to support housing demand.
Demographic Shifts: Changes in population, household formation, and migration patterns can influence housing needs and demand in different areas of Illinois.
Government Policies: Tax incentives, zoning regulations, and housing programs can either stimulate or hinder market activity.
Seasonal Variations: Real estate markets typically experience seasonal fluctuations, with spring and summer being the busiest times for buying and selling.

While it's impossible to predict the future with certainty, current forecasts suggest a gradual stabilization of the Illinois housing market. The expected moderation in mortgage rates by the end of 2025 could provide a boost to buyer confidence and activity.

My Thoughts

In my opinion, the Illinois housing market is currently in a state of transition. We're seeing a shift from the hyper-competitive seller's market of the past few years to a more balanced market. For buyers, this means more opportunities to find the right home and negotiate terms. For sellers, it means pricing your home strategically and preparing for a potentially longer selling process.

Summary: The current Illinois housing market trends present a mixed bag of opportunities and challenges. While sales are slightly down, prices are rising, and inventory is increasing.

Illinois Housing Market Forecast: What to Expect in 2025 & Beyond

I've been diving into the latest numbers, and the Illinois Housing Market Forecast paints a picture of mixed signals – while the state saw a slight overall increase in home values recently, future trends seem to vary quite a bit depending on where you are. According to Zillow, the average home value in Illinois is currently around $285,813, which is up 3.5% compared to last year. This gives us a starting point, but the real story is in the details.

Many people are asking if prices will keep going up, level off, or maybe even drop. Let's break down what the experts are saying and what the data suggests for the rest of this year and into 2026.

First off, let's look at the current situation. As mentioned, the average home value across Illinois recently hit approximately $285,813. That’s a decent jump of 3.5% over the last year. This suggests that while the market has seen some activity and value growth, it hasn't been experiencing the wild swings you might have heard about elsewhere. It feels more stable, which is often a good sign.

Latest Forecast: A Look at Illinois Regions

Now, let's get into the future projections. Zillow has provided some interesting forecasts for different areas (known as MSAs or Metropolitan Statistical Areas) within Illinois. These predictions look at the likely percentage change in home values for a few key dates. It's important to remember these are predictions, and the real market can always surprise us, but they give us a valuable guide.

Here’s how things are playing out:

Metro Area	June '25 Projection (%)	Aug '25 Projection (%)	May '26 Projection (%)
Rockford	0.2	0.3	2.1
Freeport	0.3	0	1.6
Pontiac	0.4	0.4	0.2
Bloomington	0.3	0	-0.1
Decatur	0.5	0.5	-0.1
Peoria	0.2	-0.1	-0.5
Rochelle	0.5	0.1	-0.6
Taylorville	0.9	0.4	-0.8
Chicago	0	-0.5	-1.1
Champaign	0	-0.4	-1.1
Kankakee	-0.3	-1	-1.2
Dixon	0	-0.8	-1.4
Effingham	0.4	-0.2	-1.5
Springfield	0.2	-0.1	-2.1
Sterling	-0.3	-1.4	-2.4
Charleston	0.4	-0.5	-2.5
Carbondale	0.1	-1.1	-2.6
Centralia	-0.4	-1.2	-2.6
Danville	-0.8	-1.6	-2.8
Davenport (IA)*	-0.2	-1.2	-3.6
Quincy	-0.1	-1.1	-4.2
Lincoln	0	-1.4	-4.5
Galesburg	0.2	-0.9	-4.6
Macomb	-0.5	-1.9	-5.3
Jacksonville	-0.3	-1.9	-5.5
Mount Vernon	-0.6	-2.8	-5.9

What strikes me immediately is the general trend towards declining home values in many Illinois regions by the end of the forecast period (May 2026). While some areas like Rockford might see slight growth, many others, including major hubs like Chicago and Champaign, are projected to experience small decreases.

Even more concerning are the larger projected drops in cities like Springfield, Galesburg, Jacksonville, and Mount Vernon. This suggests that while the state average might seem okay, many local Illinois housing markets could face real challenges.

Nationwide Housing Market: What's Happening?

Now, how does this compare to the rest of the country? Lawrence Yun, the Chief Economist at the National Association of Realtors (NAR), offers a more upbeat national outlook. He thinks “brighter days may be on the horizon.” Here are his key predictions for the U.S. housing market:

Existing Home Sales: Expected to increase by 6% in 2025 and jump another 11% in 2026. This points to more people buying and selling homes.
New Home Sales: Predicted to rise by 10% in 2025 and an additional 5% in 2026. This is great news for boosting housing supply.
Median Home Prices: Forecasted to grow steadily, rising by 3% in 2025 and 4% in 2026. This suggests more sustainable price increases.
Mortgage Rates: Expected to cool down, averaging 6.4% in the latter half of 2025 and dropping further to 6.1% in 2026. Lower rates often make buying more affordable and can boost demand.

Overall, the national forecast is generally positive, pointing towards recovery and modest growth, largely thanks to expected lower mortgage rates.

Will Home Prices Drop in Illinois? Will it Crash?

So, back to the big question: Will Illinois home prices drop significantly, or will the market crash?

Based on the data I've seen, a widespread statewide crash seems unlikely, especially if the national trends predicted by NAR hold true. The modest growth expected nationally, combined with falling mortgage rates, should provide some support.

However, the specific regional forecasts for Illinois from Zillow are definitely a cause for caution. Many areas, particularly outside the major metro centers or even within Chicago itself, are projected to see prices fall between now and mid-2026. This isn't a crash, but it does suggest that sellers in certain parts of Illinois might need to be more realistic about pricing, and buyers could find more negotiating power in those specific markets. It seems like the Illinois housing market might not follow the national trend perfectly, with some local areas potentially experiencing downturns.

A Look Ahead: Potential Forecast for 2026

Looking towards 2026, the national picture suggests a market finding its footing. But for Illinois, the story looks more complex. While national factors like lower rates could help, the above projections indicate that many local Illinois markets might continue to face downward pressure on prices into early 2026.

It really comes down to local conditions – things like job growth, local inventory levels, and population changes matter hugely. What happens in Chicago might be very different from what happens in Springfield or Peoria.

My advice? If you're navigating the Illinois housing market, pay close attention to trends in your specific town or neighborhood. Talking to a local real estate agent who really knows your area is more important than ever right now. They can give you the most tailored advice based on the latest local data.

In conclusion, the Illinois Housing Market Forecast suggests a period of adjustment. While national optimism exists, Illinois faces regional challenges. Stay informed, be prepared, and focus on your specific local market!

Regional strategies may need to focus on attracting investment and incentivizing homeownership to stimulate more balanced developments in less accessible markets.

Illinois Housing Market Snapshot

Key Highlights

Average Home Value: $285,813 (increase of 3.5%)

Sales Trend: Sales down by 6.5% year-over-year

Top Regions on the Rise

Region	Forecasted Growth by May 2026
Rockford	2.1%
Freeport	1.6%

Top Regions Facing Challenges

Region	Forecasted Decline by May 2026
Mount Vernon	-5.9%
Jacksonville	-5.5%

Overall Market Sentiment

Sales Trends: Expected continued volatility with varying performance across regions.

Market Outlook: Mixed, but with opportunities for growth in select markets.

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3 Housing Markets Including California Face Downturn Risk

June 17, 2024 by Marco Santarelli

A recent report by ATTOM, a leading real estate data provider, has shed light on the varying vulnerabilities of housing markets across the United States. The Special Housing Risk Report spotlights counties more susceptible to potential decline, based on factors like affordability, underwater mortgages, and unemployment rates. The data, gathered in the first quarter of 2024, reveals a concerning trend – California, New Jersey, and Illinois continue to hold the highest concentrations of at-risk markets.

Housing Market Slowdown Risk Persists in California, New Jersey and Illinois

This isn't entirely new information. Over the past few years, these same states have consistently shown up on the “most vulnerable” side of the housing market spectrum. The latest report reinforces this trend, highlighting a geographic concentration of risk, particularly in areas surrounding major metropolitan areas like Chicago and New York City, as well as inland regions of California.

In contrast, the report identifies a different story playing out in the South and Midwest, where a significant portion of the 50 counties considered least vulnerable are located. This suggests a regional divide in terms of housing market resilience.

The report emphasizes that these findings shouldn't be interpreted as a prediction of imminent decline in any specific market. Instead, they serve as an indicator of relative vulnerability based on key metrics. With the housing market experiencing a slowdown over the past year, the report highlights how some areas are inherently better positioned to weather a potential downturn compared to others.

Let's now delve deeper into the specific factors considered in the risk assessment and how they contribute to the overall vulnerability score.

Decoding the Vulnerability Score

The ATTOM report utilizes a multi-pronged approach to assess the vulnerability of housing markets across different counties. This section explores the four key factors that contribute to the overall risk score:

Foreclosure Risk: This metric evaluates the percentage of homes in a county facing potential foreclosure. A higher percentage indicates a more vulnerable market, as foreclosures can destabilize property values and inject uncertainty into the market.
Underwater Mortgages: This factor examines the proportion of homes with mortgages exceeding the estimated value of the property. These “underwater” mortgages can limit homeowners' financial flexibility and disincentivize selling, potentially leading to a stagnant market.
Housing Affordability: This metric dives into the financial burden of homeownership in a particular county. It considers the percentage of an average local wage required to cover major expenses associated with owning a median-priced single-family home. A higher percentage indicates lower affordability, making it harder for potential buyers to enter the market and potentially leading to a decrease in demand.
Unemployment Rates: Local unemployment data is factored into the analysis because job losses can significantly impact a household's ability to afford mortgage payments. Higher unemployment rates can lead to an increase in foreclosures and put downward pressure on housing prices.

By analyzing these four crucial aspects, the report assigns a vulnerability ranking to each county. Counties with a higher ranking in each category (indicating a greater risk in that specific factor) contribute to a higher overall vulnerability score. This score allows researchers and potential homebuyers to compare the relative risk profiles of different housing markets.

The report emphasizes that the data is derived from the first quarter of 2024. Real estate markets are dynamic and constantly evolving. However, understanding these vulnerability factors can provide valuable insights for those navigating the current housing landscape, particularly in areas identified as potentially more susceptible to downturns.

Let's now explore the specific counties flagged as most vulnerable and analyze the potential reasons behind their risk profile.

A Closer Look at Vulnerable Counties

The report identifies 50 counties across the United States considered most susceptible to housing market downturns. As discussed earlier, California, New Jersey, and Illinois dominate this list, with a concentration in areas surrounding major metropolitan hubs like Chicago and New York City, along with inland regions of California.

Here's a breakdown of some of the notable counties and potential contributing factors to their vulnerability:

Chicago Metro Area (Illinois): Counties like DeKalb, Kane, Kendall, McHenry, and Will in Illinois consistently rank high in terms of risk. These areas might face challenges like high unemployment rates or a larger share of underwater mortgages, making them more susceptible to price fluctuations.
New York City Metro Area (New Jersey): Essex, Passaic, Sussex, and Union counties in New Jersey share close proximity to the expensive New York City market. While offering a potentially more affordable option for some buyers, these areas might also experience a spillover effect if the New York City market faces a downturn.
California's Central Valley: Fresno, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus, and Tulare counties in California's central valley find themselves on the vulnerable list. These regions might grapple with affordability issues due to a larger gap between average wages and housing costs.

It's important to remember that the report provides a general risk assessment and doesn't paint the entire picture for each county. Specific neighborhoods within these counties might exhibit different levels of vulnerability. Local factors like economic conditions, job markets, and recent housing trends can also play a role.

However, the ATTOM report serves as a valuable starting point for further research. Potential homebuyers or real estate investors in these areas might want to conduct a more localized analysis, considering factors like specific neighborhoods, property types, and recent market trends. This deeper dive can help them make informed decisions tailored to their individual situations.

Finally, let's explore some of the counties considered least vulnerable and the potential factors contributing to their resilience.

Pockets of Resilience in a Shifting Market

While the ATTOM report highlights areas of potential vulnerability, it also identifies counties considered to be more resilient in the face of a potential housing market downturn. Interestingly, a significant portion of these counties are located in the South and Midwest regions.

Here's a glimpse into some of the counties considered less vulnerable and possible reasons behind their relative strength:

Southern States: Virginia, Tennessee, and North Carolina boast several counties on the “least vulnerable” list. These states have generally experienced steadier home price growth compared to the national average and might benefit from a more balanced housing market with a mix of affordable and higher-end options.
Midwestern Markets: Wisconsin and Minnesota also contribute counties to the resilient category. These areas might have a stronger job market base compared to some of the more vulnerable regions, providing stability for homeownership affordability.

It's important to acknowledge that even these resilient markets aren't entirely immune to potential slowdowns. However, the factors contributing to their lower risk scores suggest a greater capacity to weather market fluctuations.

Bottom Line: The ATTOM Special Housing Risk Report provides valuable insights into the varying vulnerabilities of housing markets across the United States. By analyzing factors like affordability, underwater mortgages, and foreclosure rates, the report identifies areas that might be more susceptible to downturns. This information can be a helpful tool for potential homebuyers and real estate investors, guiding them towards a more informed approach when navigating the current housing landscape.

However, it's crucial to remember that the report offers a broad risk assessment and doesn't replace a thorough analysis of specific localities. Factors like neighborhood dynamics, recent market trends, and local economic conditions can significantly influence the risk profile within a county.

Ultimately, responsible homebuyers and investors should combine the insights from this report with additional research tailored to their specific interests and location. This comprehensive approach can empower them to make informed decisions in a dynamic housing market.

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