When people in Chicago real estate talk about the market right now, most of them focus on one issue: inventory. Over half of agents say that the number of homes available to buy is the most important factor this year. Interest rates and prices matter too, but they don’t compare. The lack of enough homes on the market is what shapes almost every other conversation. If there were more homes available, it would ease pressure on buyers and sellers alike, but that’s not the case yet.
Housing Supply Has Grown, but Unevenly
Since 2005, the number of homes nationwide has grown by around 16%. On the surface, that sounds healthy, but the type of homes being built tells a different story. Multifamily housing—like condos and apartment buildings—has grown the fastest, climbing more than 50%. In contrast, the “missing middle” homes, such as duplexes, townhouses, and small multi-unit buildings, grew very little, around 11%. Single-family homes grew at the national average, but that still hasn’t been enough to close the gap between demand and supply.
Chicagoland Trails Behind Other Markets
Most U.S. cities have seen housing grow steadily, but the Chicago area lags. Only Elgin and Joliet managed to add enough homes to beat the national growth average. Chicago itself grew less than 10%, which is far below what’s needed for such a large metro area. Suburbs like Naperville, Bolingbrook, and Aurora also added homes, but again, only around 10%. While prices have gone up almost everywhere, the supply in Chicagoland hasn’t kept pace, leaving buyers with fewer choices compared to other parts of the country.
Building More Still Doesn’t Close the Gap
Even though housing supply has grown faster than the population in recent years, it’s still not enough. The U.S. population has grown about 11% since 2005, which is less than the growth in housing. But experts estimate we’re still short by almost 4 million homes. That shortage means prices keep climbing, even when new construction is happening. The reality is that demand is so strong that even a steady pace of building can’t catch up with what’s needed.
The South Surges While the Midwest Stalls
The strongest housing growth has been in the South and West, where cities are adding new developments at a fast clip. Meanwhile, many cities in the Midwest have either grown very slowly or even lost housing. Michigan, for example, has several places where the number of homes has gone backward. Chicagoland isn’t losing housing, but it’s not growing fast either. There are a couple of bright spots—towns like Cicero and Schaumburg stand out for having a higher share of “middle housing,” such as townhomes and duplexes. Still, overall, the Midwest trails behind the booming regions of the country.
