Home LoansMortgage

Best Cities for Homeownership in Illinois

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Illinois’ notoriously high property taxes can squeeze the housing budgets of homeowners in the state. On top of the state’s high taxes, homes aren’t appreciating as fast as they are in some other areas of the country; as of 2016, Illinois home prices still hadn’t returned to the levels of 2006’s pre-recession prices, according to Illinois Policy.

As of 2017, the median value of owner-occupied homes in the state was $179,700, according to the U.S. Census Bureau.

Yet, Illinois homeowners in certain metropolitan areas may still benefit from homeownership, according to a new LendingTree study. We compared factors such as home values and appreciations, housing costs, unemployment rates and average commute times to rank the homeowner-friendliness of Illinois communities. Here’s what we found.

Key findings:

  • The Effingham micro area is the best place for homeownership in Illinois. This area has a high median home value for the state ($142,100), the lowest unemployment in the state (4.4%), a short average commute time of 17.3 minutes and the largest increase in home values from 2013 to 2017 (17.83%). The only category that it did not do well in was housing costs. From 2013 to 2017, housing costs rose by 3.59%, which was the second-highest increase in the state.
  • The Canton micro area is the worst place for homeownership in Illinois. It has a low median home value ($87,800), higher unemployment for the state (7.7%) and a longer average commute time of 24.7 minutes.
  • The Chicago-Naperville-Elgin metro area ranked 23rd in this study. While it has the highest median home value ($228,300), it also has a high unemployment rate of 7.6%, the longest average commute time in the state, at 31.6 minutes, and decreasing home values from 2013 to 2017 (-0.65%).

The best cities for homeownership in Illinois

1. Effingham

Effingham, located in south-central Illinois, takes the top spot as the best place for homeowners in the state. Rising home values are the most significant boon to homeowners here. The median appreciation of Effingham homes was a healthy 17.83% from 2013 to 2017. However, housing costs also rose during this time period, at a rate of 3.59%. The median home value here was $142,100 in 2017.

This city also had the lowest unemployment rate of any Illinois metro we surveyed, at 4.4% in 2017. Effingham homeowners have quick commutes to work, too, averaging just 17.3 minutes.

2. Champaign

The Champaign metro area includes Urbana and is home to the University of Illinois at Urbana-Champaign. Champaign has one of the highest median homes values in our study, at $154,700. It also has a relatively low unemployment rate, at 5.2%. Commutes average just 18.5 minutes.

With so many college students attending nearby U of I, the local housing market has an abundance of rentals. But the rental market did not dampen home values, which appreciated at a rate of 4.1% from 2013 to 2017.

3. Quincy

Located right on the border of Illinois and Missouri, the Quincy metro area includes a portion of the neighboring state. The city experienced  the third-highest median home value appreciation of all the areas on our list, rising 16.82% from 2013 to 2017. Housing costs rose 2.2% at the same time.

The 2017 unemployment rate in Quincy was 5.2%, and the average commute time is 18 minutes.

4. Pontiac

Pontiac ranked well in part due to a dip in housing costs, which fell 5.28% from 2013 to 2017. During that time frame, however, home values in this town also depreciated by 4.6%. That puts the median value of Pontiac homes at $112,100, which is fairly middle-of-the-pack for Illinois cities.

A lower unemployment rate of 5.5% in the Pontiac micropolitan area also helped to secure its spot among the best places for Illinois homeowners.

5. Sterling

Homeowners living in Sterling can expect short commute times, at an average of just 19.4 minutes. However, the 2017 unemployment rate here, at 6%, was on the higher side compared to many of the other areas on our top 10 list.

Home values appreciated 6.89% from 2013 to 2017, which landed the median value here at $108,600 in 2017.

6. Jacksonville

The Jacksonville micropolitan area ranks sixth overall, but it boasts the second-highest rate of home value appreciation, after Effingham. Here, median home values rose 16.89% from 2013 to 2017 and were $106,600 as of 2017.

Jacksonville had a 6.5% unemployment rate in 2017, and the average commute time is 20 minutes.

7. Moline

Located right on the Iowa border, Moline is included in the Davenport-Moline-Rock Island metropolitan area. Here, a 2017 unemployment rate of 5.5% points to greater job security for locals than in some other areas of the state. Moline-area homes also have relatively higher values than some other top 10 cities, with the median at $134,800 as of 2017.

The Moline housing market was leaning toward a buyer’s market as of December 2018, per Realtor.com, making it accessible to new homeowners. And the relatively shorter average commute of just 19.8 minutes is an advantage for local homeowners.

8. Springfield

The biggest benefit to homeowners living in the state capital is higher home values, with a median of $141,200 as of 2017. This reflects a median rate of home value appreciation — 6.25% from 2013 to 2017 — that beat out some other Illinois cities we compared.

The area did have the highest 2017  unemployment rate of all the areas on our top 10 list, at 6.7%. Its average commute time is a reasonable 20 minutes.

9. Lincoln

Just a short 30-minute drive northeast of Springfield is the next top city for Illinois homeowners: Lincoln. Here, homeowners benefit from a strong job market, as reflected in the micropolitan area’s relatively low 5.6% unemployment rate, as of 2017. Housing costs have also remained fairly low and actually fell by 1.55% from 2013 to 2017.

In contrast to falling housing costs, home values rose over that same time period, appreciating 5.27%. The median home value in Lincoln was $101,900 in 2017.

10. Peoria

A home in Peoria tends to have a higher median value compared to other Illinois cities, at $138,900 in 2017. From 2013 to 2017, Peoria’s median home value appreciation was a decent 4.44%. This steady appreciation and higher home values helped Peoria secure its spot as an Illinois city where homeownership pays off.

The area did have a relatively high 2017 unemployment rate of 6.6% — the second-highest on our top 10 list.

Homebuying tips for Illinois

Illinois homeowners might have some statewide trends working against them, such as high property taxes and lower overall home appreciation. This makes it all the more important to be aware of the costs and financial burdens that can come with buying and owning a home in this state.

If you’re looking to become a homeowner in Illinois, here are some tips to financially prepare for this step.

Plan for high property taxes

Illinois has the sixth-highest property tax rates in the nation, according to the most recent state rankings from the Tax Foundation. These rising property taxes have outpaced income growth to become a pain point in many homeowners’ budgets, according to the Illinois Policy Institute.

Homebuyers can’t afford to let Illinois’ property taxes be an afterthought in the process of purchasing a property. Property tax records are public, so look up past taxes assessed on a home you’re interested in buying. Many counties have online portals to conduct such a search, or you can ask your real estate agent for help finding this information. Then, look at your property taxes alongside other ongoing costs, such as a mortgage payment or homeowners insurance premiums, to see if the total costs are within your budget.

Even if you do buy a home or are already an Illinois homeowner, you’re not necessarily stuck with high property taxes. You can appeal your property tax assessment to have a chance at reducing this cost.

Have a mortgage preapproval in hand

Applying for preapproval is a smart step for homebuyers who are starting to actively shop for a home. The preapproval process includes a full review of your credit history, income and other financials that could impact your ability to meet the requirements for a mortgage.

The process of applying for preapproval will help you understand how much home you can afford and how large of a home loan you can get — priceless information for starting your search. Going through the preapproval process can help you project your mortgage payments so you can see if these will be manageable (especially when adding in costs such as property taxes).

Getting a preapproval also tells sellers that you’re a qualified homebuyer, which could give your purchase offer an edge if there are any competing bids.

Know your Illinois mortgage options

Shopping for a mortgage is always smart — it can save you thousands of dollars over the life of your loan. But don’t overlook Illinois’ state homebuying programs that can help ease the financial burden of taking this step.

The IHDA Mortgage program offers a few options to help homebuyers who meet income and purchase price requirements. This takes the form of affordable fixed rates and up to $10,000 in down payment assistance, either as a grant or an interest-free loan.

The 1stHomeIllinois is also an option to help first-time homebuyers and veterans purchase homes in Boone, Cook, DeKalb, Fulton, Kane, Marion, McHenry, St. Clair, Will or Winnebago counties. It can help these buyers secure a 30-year, fixed-rate mortgage and offer grants of up to $7,500 for down payment assistance.

When buying a home in Illinois, every decision can impact your costs. From the location you choose to the lender or mortgage you select, comparing options and doing your research is key to keeping homeownership affordable – both now and for years to come.

You can check mortgage rates in Illinois here.

Methodology:

The methodology for this study was simple and straightforward.

1: Collect metropolitan statistical areas (“MSAs”) and micropolitan statistical area from the U.S. Census Bureau using 2017 population data.

2: Each MSA and micropolitan statistical area was ranked on a scale from 32 (Best) to 1 (Worst) for five different metrics. Those metrics are:

Median Home Value (32-Highest Value, 1-Lowest Value)

Unemployment Rate (32-Lowest Rate, 1-Highest Rate)

Average Commute Time (32-Shortest Time, 1-Longest Time)

Median Home Value Appreciation (2013-2017) (32-Greatest Appreciation, 1-Smallest Appreciation)

Median Change in Yearly Housing Costs (2013-2017) (32-Smallest Cost Change, 1-Greatest Positive Cost Change) — The formula for this metric is:

(((Monthly Housing Costs for 2017 *12)+(Real Estate Tax for 2017))/ ((Monthly Housing Costs for 2013 *12)+(Real Estate Tax for 2013))-1)

3: An average score was then calculated for each MSA based upon the scores received for each metric.

4: The MSAs and micropolitan statistical area were then ranked on a scale of 1 (Best) to 32 (Worst) based on their average score.

5: All metrics were ranked equally.

Data:

All data were obtained from the U.S. Census Bureau. More information on where the data came from is provided below:

2017 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filter for Financial Characteristics for housing units with a mortgage – 2013-2017 American

Community Survey 5-Year Estimates

2017 Unemployment Rate and Median Commute Time

  • Filtered for all MSAs
  • Then filter for Selected Economic Characteristics – 2013-2017 American Community Survey 5-Year Estimates

2013 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filter for Financial Characteristics for housing units with a mortgage – 2013-2017 American Community Survey 5-Year Estimates
 

Today's Mortgage Rates

  • 2.362%
  • 2.337%
  • 3.08%
Calculate Payment
Advertising Disclosures Terms & Conditions apply. NMLS#1136