Several Illinois Cities Rank Among Nation's Most Affordable

From The Center Square:

By Kevin Bessler

A new study found six Illinois cities rank among the top 50 most affordable housing markets in the country, largely as a result of depressed home prices.

The website RefiGuide compared income and the cost of a house to determine how far the median household income could go toward the purchase price of a home in that city. Peoria ranked sixth in the country, Decatur ranked eighth, Joliet ranked 13th, Rockford ranked 21st, Springfield ranked 29th and Bloomington ranked 34th.

To calculate the affordability, RefiGuide took median annual income as a percentage of home prices in the area. Peoria, for example, has a 63.9% affordability grade.

Ed Neaves, president of the Illinois Realtors Association, said there are still good-paying jobs in some of the cities with depressed neighborhoods.

“Those are the metrics they are using to say that it is the most affordable place to buy,” Neaves said. “It doesn’t say anything about the quality of the real estate market. Some of those places are so depressed that their average sale price is extremely low.”

Record low mortgage interest rates combined with people spending most of their time at home because of the pandemic has caused a boom in home buying in many markets, including Illinois. There also appears to be a wave of people moving away highly congested areas and into suburban settings.

Neaves said housing prices in Illinois differ widely.

“Chicago’s median home price is $330,000. That’s a big number,” he said. "Champaign-Urbana is $167,000. Danville’s median sale price is $93,000, but Danville’s overall median income is not that high or they would show up.”

Overall, Illinois is listed as the fifth most affordable state to buy a home, behind Mississippi, Ohio, Oklahoma and Michigan. The least affordable state was Hawaii, based on the metrics the website used.

As for what the future holds for the Illinois housing market, Dr. Geoffrey Hewings, emeritus director of the Regional Economics Applications Laboratory at the University of Illinois, said the pandemic could hold the key.

“Is this going to last 3 months, 6 months, 1 year or 2 years, and I think until that sort of resolves itself, we will probably see prices sticking,” Hewings said.

Illinois has among the highest property taxes in the nation, which can affect home prices.

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