Illinois is at a crossroads in housing affordability, struggling to add new homes fast enough to meet demand even as costs rise beyond what many middle-income buyers can afford. According to Realtor.com®’s State-by-State Housing Report Card, the state earned a C grade, reflecting limited new construction, sluggish affordability gains, and a market that’s failing to keep pace with regional competitors.
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The report is part of the Let America Build campaign, which grades states based on how effectively they balance housing supply and cost. Illinois’ performance reflects a persistent problem: demand remains stable, yet construction activity lags, squeezing buyers already facing rising living expenses.
Housing scarcity is a national concern. President Donald Trump recently criticized major homebuilders, calling them out for slow production and claiming builders are artificially constraining supply. On Truth Social, he said:
“They’re my friends … but now, they can get Financing, and they have to start building Homes. They’re sitting on 2 Million empty lots, A RECORD.”
He urged federal intervention to “get Big Homebuilders going” and “restore the American Dream.”
Despite being a key Midwest market, Illinois has failed to keep up. In 2024, it accounted for just 1.3% of all U.S. housing permits, even though it makes up 3.7% of the U.S. population.
Illinois earned a score of 50.1 in the ranking. Median home prices reached $316,613 in 2024, with median household income at $79,180. However, slow permitting and a lack of entry-level construction have left working buyers with too few options. New homes are priced 75% higher than existing homes, meaning most new inventory caters to wealthier buyers rather than first-time homeowners or working families.
In nearby Midwestern states like Indiana and Missouri, steady permitting has helped preserve affordability. In Illinois, the combination of high property taxes, aging housing stock, and municipal red tape has made development difficult, widening the affordability gap.
National Association of Realtors® executive vice president Shannon McGahn emphasizes the scale of the crisis:
“America is short more than 4.7 million homes, and every new home built helps close that gap while fueling local economies.”
She added: “Expanding housing supply creates jobs, supports small businesses, and affords families the opportunity to build generational wealth.”
Governor JB Pritzker’s administration is pushing legislation aimed at increasing supply. His measures in 2025 include:
Pritzker has also highlighted real projects that demonstrate progress. In November, he joined developers, labor leaders, and community representatives to celebrate the $20 million Community of Sunnybrook development in Madison County. The project adds 40 new rental homes designed for working families and is part of a broader economic revitalization strategy.
At the event, the governor said:
“Sunnybrook is providing 40 new units to the people of Alton, making it easier for families to lay down roots and workers to contribute to the local economy.”
He added: “We’re working to make life more affordable for working families… Our communities have more demand, more opportunity, and more room for new housing—and it’s on us to deliver.”
The National Association of Home Builders supports many of Pritzker’s proposed solutions. Its Blueprint to Address the Housing Affordability Crisis calls for:
NAHB states clearly, “the only sustainable path to affordability is building more attainable homes.”
Illinois’ C-grade reflects a market with serious challenges, but it also signals untapped potential. With existing infrastructure, available land, and a strong workforce, the state could regain leadership in the Midwest housing market — if reforms successfully speed up construction and diversify the types of homes being built.
In the end, Illinois may have the ingredients for a rebound. The question is whether its policies and local governments can move fast enough to turn demand into tangible, affordable housing supply.
Originally reported by The Realtor. Com Team.
