Illinois home prices rising, inventory nearly half
Since 2019, Illinois home prices have jumped nearly 50% and available houses are down nearly 50%. Blame property taxes and zoning.
The price of owning a home in Illinois has climbed nearly 50% during the past five years while inventory is down by the same amount.
A home that cost $191,454 in December 2019 costs $277,191 now, according to Zillow’s Home Value Index, which tracks the price of similar homes over time. That translates to Illinois housing values jumping 44.8% in that time.
But that statewide average doesn’t tell the whole story. Some Illinois cities have seen worse price surges.
Cities such as Sauk Village, Ford Heights and Dixmoor have had home prices more than double what they were at the end of 2019.
Other areas have experienced more moderate increases, but virtually every corner of the state has seen significant price growth. The jump in prices means what was once affordable for many Illinois families has now moved out of reach.
A major reason for these price increases is there aren’t enough homes available for people who want to buy them. When demand stays steady but supply drops, prices rise.
The numbers from Zillow paint a stark picture: All 26 Illinois metro areas that Zillow tracks have seen their housing inventories shrink since December 2019.
Chicago had 43,039 homes available for purchase at the end of 2019. At the end of 2025, that number fell to 20,614 – a drop of 52%. Over half the available homes have vanished.
And Chicago isn’t the worst-hit area. Twelve other Illinois metro areas have experienced even steeper declines.
Nationally, the picture is better. The country has recovered to 80% of pre-pandemic listing levels. Illinois lags far behind that mark, stagnating at 36%.
The obvious solution would be to build more homes. But Illinois metros aren’t building at the pace needed to address the shortage.
One study reported a shortage of 142,000 homes. Construction rates remain low across the state, failing to keep up with demand or replace the inventory that’s disappeared from the market. They would need to double during the next five years to keep up with demand.
The housing shortage in Illinois didn’t happen by chance. It’s primarily because of policy decisions that complicate new construction.
Stringent zoning regulations throughout the state hinder builders from creating the kinds of homes that could ease the scarcity. Illinois’ property taxes rank as the highest nationally, cutting into people’s housing budgets.
There are many practical measures communities could use to simplify housing construction. For instance, cities could allow greater density and approve structures with eight to 10 units in high-demand, bustling zones.
Cities mandating parking spaces creates another obstacle, even near transit where residents may not need cars. Chicago and other areas have begun easing these demands near transit, which opens up additional room for housing.
Another viable approach comes from accessory dwelling units, often referred to as “granny flats” or “in-law suites.” These compact, secondary dwellings on current lots can help early-career individuals or seniors looking to scale down while staying in their community. Making these units legal across the state would introduce more housing choices without significantly altering the essence of neighborhoods.
Municipalities could also decrease the minimum lot sizes needed for single-family houses, a change that analysts project could result in Illinois constructing 10,000 additional units annually.
Despite potential zoning adjustments, families in Illinois encounter an additional hurdle: keeping their properties.
The state’s property taxes continue to be the steepest in the U.S., putting ongoing pressure on family finances. Even households that manage to gather funds for an initial down payment and regular mortgage payments might face foreclosure because of unmanageable tax obligations.
Addressing the housing crisis in Illinois demands confronting these dual issues simultaneously. Reforms to zoning can boost the availability of homes and reduce costs.
But without property tax relief and other fiscal improvements, many Illinois families will find it tough to buy and keep homes – regardless of how much the state boosts construction.