Real estate professor says Illinois homeownership rate; Not that badJanuary 20, 2022
Illinois was ranked 20th lowest in the nation for homeownership rates in 2019, the last year of available state data, with 66% of Illinoisans owning their own abode.
Dan McMillen, professor of real estate at the University of Illinois Chicago, says 20th in the nation isn’t terrible.
“It really means we’re in the middle of the pack,” he said.
Factors that determine homeownership rates are the percentage of the population that lives in an urban area, home prices and demographics, according to McMillen.
“Urban areas tend to have significantly lower homeownership rates than more rural areas, and so since Illinois is so dominated by the Chicago metropolitan area it’s more likely to have lower homeownership rates,” he said.
Chicago plays a role in home prices as well, but it wasn’t as extreme as McMillen expected.
“I was actually surprised that we were 20th in terms of homeownership rates,” he said. “I thought Illinois would be in the top 10 because of Chicago having relatively high prices and being a big urban area.”
Average home values in Illinois come out $31,400 less than the national average, as reported by Patch.
While a national housing boom occurred, more Illinoisans did not end up owning houses, according to McMillen.
As people scurried to buy homes over the last 18 months, national rates climbed 3% in the second quarter of 2020 to 67.9%, Patch reported. McMillen pointed out in Illinois some houses were switching hands, but more residents don’t own houses because no new houses were built.
“It’s sort of been a rearrangement of people, it’s been some people moving to buy other houses, but they’re paying a lot of money to do it right now because there really aren’t that many houses on the market,” he said.
Homeownership rates are a complex issue that has been much studied, he said, adding rates vary a lot within states and demographic groups.
“There’s a lot of factors that are pretty easy to identify, but it’s not necessarily easy to predict how it’s going to change in the next five to 10 years,” he said.
McMillen notes however that rates have been going down since 2008’s recession and while they may level out, he doesn’t expect them to rise.
“Long-term trends are hard to reverse, and we’ve been in a long downward slide and I expect it’s just going to bottom out before it really turns up,” he said.
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