Illinois Trails Every State Except Alaska, Rhode Island In Per Capita Homebuilding: Report

CHICAGO — New home construction in Illinois is falling behind almost everywhere else in the United States, with the state ranking among the lowest for housing permits issued in 2023.

Illinois saw just 0.8 units authorized per 1,000 existing homes, placing it third from bottom — joining Rhode Island, Alaska and West Virginia as the only states to permit the construction of less than one new housing unit for thousand that already exist.

The slowdown is particularly evident in the Chicago metro area, where rising material costs, labor shortages and prolonged project timelines have hit the construction industry hard.

In the Chicago-Naperville-Elgin IL-IN metro area, where the median home price in the Chicago metro area is about $327,000, there were 17,539 new housing units authorized for construction in 2021.

By 2023, that was down 15.6 percent to 14,801.

That equates to 3.8 new housing units per 1,000 existing — the sixth-lowest growth rate of the 53 metropolitan areas studied in a new report from Construction Coverage.

Only Buffalo, Providence, Rochester, Detroit and Cleveland build fewer new units, according to the report.

Several other Illinois metro areas ranked among the slowest growing in the nation, which has been grappling with a shortage of new housing supply since the 2008 recession.

New home construction in Kankakee fell by more than 38 percent from 2021 to 2023, more than 28 percent in Rockford and nearly 47 percent in Peoria.

But the state's lowest overall per capita rate of new housing units added to the market was in Decatur — a town of 100,000 people that authorized just 34 new homes last year, representing a one-home increase from two years earlier.

Nationwide, delays in starting and finishing single-family housing projects have become increasingly common, a trend exacerbated by supply chain disruptions and inflationary pressures.

From 2019 to 2023, the percentage of single-family homes that took two months or more to start construction after obtaining permits increased from 20 percent to 31 percent.

Construction in Illinois lags way behind states like Utah and Idaho, which lead the nation with 5.7 and 5.6 new units per 1,000 existing homes, respectively.