Illinois Real Estate Outlook: Current Trends and Predictions for 2025-2026
Illinois Housing Market Forecast for 2026: Moderate Growth with Regional Variation
The Illinois housing market is expected to see moderate home price growth statewide, but with significant regional variation, according to the latest forecast. Median home prices in Illinois are projected to increase by around 4% in 2026, following a 3% rise in 2025.
In terms of home sales, the number of transactions in Illinois overall may remain relatively flat or see modest declines in some areas. For instance, in the Chicago metro area, single-family home sales slightly dropped 3.5% year-over-year as of May 2025, even as prices rose around 6.3%. Chicago's inventory has increased modestly by 3.9%, giving buyers more options, and homes are staying on the market slightly longer, indicating a slower but stable market rather than a crash.
Regional trends across Illinois can be summarized as follows:
| Region | Price Trend | Sales Trend | Inventory Trend | |-----------------|-------------------|-----------------------|-----------------------| | Chicago Metro | Modest price growth (~6% YoY) but possibly uneven | Slight decrease in sales (-3.5% YoY) | Moderate increase (~3.9%) | | Other Metro Areas & Rural | Some areas may see price declines into mid-2026 | Buyer negotiating power may improve | Variable, generally stable or increasing | | Midwest/Affordable Regions | Continued resilience, with about 6.4% annual price surge as of mid-2025 | N/A | N/A |
Outside major metro centers and certain areas in Chicago, many regions might experience price declines. Areas like Rockford might see slight growth, but many others, including Springfield, Galesburg, Jacksonville, and Mount Vernon, are projected to experience larger drops in home values.
On a statewide level, prices are expected to continue rising but at a slow, steadier pace rather than dramatic spikes or crashes. Falling mortgage rates nationally should support demand, preventing a steep downturn overall. Inventory is slightly increasing in major markets allowing buyers somewhat more choice. Existing home sales nationwide, which Illinois is a part of, are projected to stabilize around 3.7 million units in 2026 after a recent decline, echoing the more measured activity forecast in Illinois.
In summary, Illinois housing in 2026 is forecasted to show:
- Price growth averaging about 4% statewide but with localized dips
- Modest decreases or stability in home sales depending on the region
- Slight rise in inventory in key metro areas like Chicago, helping balance supply and demand
- No statewide market crash expected, but a nuanced, regionally varied market environment.
Buyers may find more opportunities especially outside Chicago's strongest neighborhoods, while sellers in certain regions will need to price homes realistically given competitive conditions.
Sources:
- Realtor.com
- National Association of Realtors
- Chicago Association of Realtors
- Illinois Association of Realtors
- With median home prices projected to increase by around 4% in 2026, investors may find attractive opportunities in the Illinois real-estate market.
- The tax implications of owning a turnkey property in Illinois should be carefully analyzed before making an investment decision.
- The growth in the Illinois housing market is expected to be moderate, with regional variation, making it crucial for finance experts to keep abreast of the latest real-estate news.
- In some locations outside Chicago, such as Rockford, Springfield, Galesburg, Jacksonville, and Mount Vernon, the rental market may offer attractive yields given the projected price declines in home values.
- The Illinois Association of Realtors has provided insight into the regional variation in the housing market, which can guide investors' decisions about where to focus their real-estate investments.
- As the number of transactions in Illinois overall may remain relatively flat or see modest declines in some areas, landlords may need to adjust their rental strategies to adapt to the slower growth in the housing market.
- With existing home sales nationwide projected to stabilize around 3.7 million units in 2026, the Illinois housing market is likely to continue its moderate growth trajectory, although there may be pockets of decline in certain locations.
