Key housing market trends in northeastern Illinois

Economic prosperity drives the housing market, which, in turn, fuels economic prosperity. Although northeastern Illinois is one of the world’s great economic centers, the region has fallen behind similarly sized metropolitan areas over the past decade.

This piece investigates key housing market trends in the region and helps local officials consider what they mean for local decision-making.

The region has added roughly one housing unit for every household added

Production of housing in northeastern Illinois has increased by about 14 percent over the last two decades (most of that growth occurred prior to 2010). The number of households in the region grew at a similar rate, increasing 12 percent since 2000. The region’s population only grew by about 5 percent in the same period.

Overall, the region has added about 418,600 housing units and roughly 340,000 households. In other words, the region has added about one unit for every household added within the past 20 years.


During that time, most of the region’s housing growth occurred in areas outside of Chicago and suburban Cook County. Sixty percent of housing units added to the region are in the collar counties. This is in line with household growth — 74 percent of all households added since 2000 live in the collar counties.

Chicago was the only area in the region that added fewer housing units than households. In Chicago, there is roughly only one housing unit added for every two new households. Suburban Cook County experienced the opposite trend, producing about four housing units for every new household.

As a whole, the region has added a roughly balanced number of housing units over the last two decades. But other factors, such as the diversity of housing types, are also important. ON TO 2050, the region’s long-range plan, calls for matching the regional and local housing supply with types that residents want. Communities should plan for an array of housing options that supports people at varying income levels and at all stages of life.

Households added vs. housing units added by area (2000-2020)

AreaHouseholds addedHousing units added
City of Chicago80,76148,162
Suburban Cook County31,771120,683
DuPage County22,20529,349
Kane County46,64149,512
Kendall County24,74525,489
Lake County36,90243,459
McHenry County24,90526,800
Will County72,40775,154
Source: CMAP analysis of 2000 and 2020 decennial census data

The volume of housing permits has declined since the Great Recession

Most of the region’s housing building permits over the past 20 years have been issued in Cook County, including in Chicago. However, surrounding suburban counties, such as Lake and Will counties, continued to grow. From 2000 to 2020, 29 percent of all permitted housing units were in Cook County, compared to a combined 22 percent in Lake and Will counties.

The volume of new housing permits authorized in the region began declining shortly after the Great Recession. From 2000 to 2006, between 40,000 and 50,000 building permits were issued each year. That number dropped to 5,700 in 2009, and it has only returned to about 17,000 (2019) since then. As of 2020, new home permits still lagged the pre-recession levels, at roughly 14,700.

Since the COVID-19 pandemic began, there has been high demand for housing across the country, in part due to lower home loan interest rates put in place to stimulate economic growth. Oddly, between 2019 and 2020 the Chicago metropolitan region saw a 14 percent decrease in building permits. One factor that may have influenced the drop in permits is the rise in homebuilding commodity prices.

Building permit data can be an early indicator of activity in the housing market; however, it is not unusual for the status of permits to change (e.g., canceled, voided, or expired). These changes affect the relationship between permits issued and homes that began construction. The difference, whether substantial or not, is worth tracking.

Single-family detached homes are still the majority, but multifamily units are increasing

The types of housing units built in the region also changed markedly over the last two decades.

Single-family detached homes

During the early 2000s, permits for single-family detached homes made up about 61 to 75 percent of all permits in the region. But that changed following the recession in 2008. As of 2020, although permits for single-family detached homes continue to be the majority, the share is far less (53 percent). This change is mostly a result of a shift in Chicago and suburban Cook County.

Little to no change has occurred in the collar counties, where roughly three-quarters of new home permits are for single-family detached homes.

DuPage County is an exception. In 2012, 99 percent of new housing permits in DuPage were for single-family detached homes. Today, permits issued in the county are nearly split evenly between single-family detached homes and large multifamily units (five or more units).

Large multifamily units

Permits for large multifamily units have seen some growth throughout the region. In 2020, 41 percent of all permits issued were for large multifamily units, nearly double the share 20 years ago.

Chicago continues to issue the largest share of permits for large multifamily units. However, the share has increased in some collar counties. For example, in Kane County, the share of permits for large multifamily units increased from 4 percent in 2010 to 24 percent in 2020.

Small multifamily units

The share of permits approved for small multifamily units (three to four units) continue to make up a small percentage of permits approved across the region. In 2020, they made up only 3 percent of all permits issued. Similarly, over the last two decades, a small number of permits were issued for duplexes (two units).

Housing starts remain low across the region

Across the region, housing starts — the number of new housing units on which construction has started — follow a similar trend as building permits. From 2000 to 2007, between 21,000 and 36,500 housing starts were recorded each year in the region. By 2010, housing starts had dropped to 2,300. They have since only returned to about 5,000 (2020), nowhere near pre-recession levels.

Housing starts in northeastern Illinois

The region’s slow population growth might be driving the low housing starts. Housing developers assess trends in population and have less incentive to construct new homes where numbers are low.

Interestingly, Will County has outpaced the rest of the region with the most housing under construction. In 2020, over 1,400 housing units were started in Will County, while Chicago only saw 234 — the lowest amount in the past seven years. In fact, Chicago was the only area in the region that experienced a significant dip in home construction due to the pandemic — a 71 percent drop from 2019 to 2020.

Community highlight: Shorewood looks to develop more diverse housing

Like many other communities across the region, the Village of Shorewood, in Will County, is a majority single-family housing community. In 2019, nearly 80 percent of the village’s housing stock was single-family detached homes.

Shorewood, a community of more than 18,000 residents, has a median household income of $105,938. However, close to 20 percent of households make less than $49,999. Shorewood also has a higher percentage of residents 65 and older than both Will County and the region as a whole. The village acknowledges the importance of generating housing that meets the needs of all residents, and will be exploring how to do this with through the development of a new comprehensive plan.

For Shorewood, understanding local context is key to developing a more diverse housing stock. This requires frequent communication between community members and village staff. For example, the village conducts community surveys every few years to gauge perceptions and identify priorities. The results help inform strategic plans and other community efforts. The last survey found that “2 out 3 residents thought it was important to diversify housing types to meet the preferences and needs of all age groups.” However, over the last decade, Shorewood has seen hardly any multifamily development. Instead, single-family housing development continues to grow even amid a pandemic.

The Shorewood comprehensive plan will offer additional opportunities for staff interaction with residents. The village is hopeful that public engagement during the plan will help raise participation and awareness around land use issues, including the necessity of housing diversity.

Key questions: What should my community consider?

The housing growth patterns across northeastern Illinois have mixed implications for communities. Local officials and housing experts should consider the following:

1. Are we still planning for the sizable growth anticipated in the mid-2000s? If so, consider reviewing those assumptions and the regulations that go with them.

2. Are we still planning for mostly single-family growth? Much of the housing demand in the region since the Great Recession has been in the multifamily space.

3. Are we thinking about missing middle housing? There has been little to no permitting in the region for duplexes, triplexes, and small multifamily units. Consider how your community could benefit from offering something not currently available in the market. How can you assess need?

4. Should we proactively engage in discussions on housing affordability due to slow housing growth and greater demand?

As the region’s comprehensive planning organization, the Chicago Metropolitan Agency for Planning (CMAP) provides extensive community data and offers programs with strategies that address these questions and more.

For example, the Homes for a Changing Region program helps municipalities identify solutions to their most pressing housing challenges, create a balanced mix of housing types, and serve the needs of multiple generations of residents and workers. A partnership between CMAP and the Metropolitan Mayors Caucus, the Homes program receives supported from the Illinois Housing Development Authority. Communities interested in updating zoning ordinances or revising single-family zoning districts should also consider CMAP’s technical assistance program.

Interactive versions of the housing data charts are also available on this dashboard.