Illinois Near Bottom in New Housing Construction
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Illinois Near Bottom in New Housing Construction
- From June 2025 to May 2026, Illinois issued 157 permits for new housing construction units per 100,000 residents, placing it second-to-last among U.S. states.
- This limited construction pipeline has contributed to a 49% increase in average home prices in Illinois since January 2019, according to Zillow's Home Value Index.
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Illinois has ranked second to last among U.S. states in new housing construction on a per capita basis between June 2025 and May 2026. With 157 permits issued per 100,000 residents, only Alaska built fewer homes during this period. This rate is less than half the national average of 412 permits per 100,000 residents. Idaho, by contrast, led the nation with 861 permits per 100,000 residents.
The slow pace of homebuilding in Illinois has had significant consequences for the state’s housing market. Home prices have risen by 49% since January 2019, with the average home price reaching $277,483 as of March 2026, up from $186,366. This surge in prices has made homeownership less accessible, requiring larger down payments and bigger mortgages. Renters are also experiencing increased costs due to the limited supply.
The housing shortage is not a new issue for Illinois. A report in June 2025 indicated that the state faced an existing housing shortfall of 142,000 units and would need to build 227,000 new homes over the subsequent five years to meet demand. Factors contributing to this deficit include decades of underbuilding, rising material and financing costs, increased investor ownership of properties, and restrictive zoning laws. Efforts to enact statewide zoning reforms, such as Governor J.B. Pritzker’s Building Up Illinois Developments Act, have not passed due to concerns from municipal authorities about losing power.