ILLINOIS – Amid a national housing affordability crisis, a new report by Realtor.com and Yahoo Lifestyle finds that Illinois remains one of the most accessible states for first-time homebuyers—with several regions offering starter homes at prices that don’t require steep income increases.
According to Realtor.com’s 2025 Housing Report Card, buyers in Illinois only need to earn around $38,369 annually to afford a typical starter home, compared to states like Wisconsin ($61,475) and California ($130,000+).
What’s a Starter Home?
In this report, “starter homes” refer to properties in the lowest-priced tier of listings—typically older, smaller homes suitable for individuals or couples entering the market. The median price for a starter home in Illinois was $160,200, one of the lowest among high-population states.
By comparison:
- National median starter home price: $243,000
- Illinois: $160,200
- Chicago Metro: $254,243
- California: $499,000+ (starter tier)
What Salary Do You Need to Buy in Illinois?
To determine affordability, Realtor.com applied the 30% rule—where housing costs should not exceed 30% of a household’s monthly income. Based on this, here’s what buyers need:
| Location | Median Starter Price | Salary Needed |
|---|---|---|
| Illinois | $160,200 | $38,369 |
| Chicago Metro | $254,243 | $61,111 |
| Wisconsin | $258,472 | $61,475 |
| Indiana | $191,584 | $45,595 |
| California | $498,000+ | $130,000+ |
This places Illinois as one of the best-ranked affordable large states in the country for new buyers.
Where in Illinois Are Starter Homes Still Accessible?
The report found several Illinois cities where homes are still within reach:
- Peoria – Strong supply of homes under $150,000
- Rockford – Affordable pricing with proximity to Chicago
- Springfield – State jobs and median prices near $170,000
- Decatur & Bloomington – Under $160K average listings
In contrast, cities like Naperville or Evanston are significantly pricier, with entry-level homes exceeding $350K to $400K—well outside the reach of most first-time buyers.
Why Is Illinois Still Affordable?
While Illinois remains affordable, Realtor.com gave the state a “C” grade in housing health due to:
- Low construction rates: IL makes up 3.7% of U.S. population but issued only 1.3% of permits
- Slow home growth compared to housing demand
- Stagnant population growth preventing massive price spikes
- Fewer bidding wars than in high-demand states
Rising Mortgage Costs Still a Concern
Despite affordability in price, buyers still face:
- 83% increase in monthly payments for starter homes over the past 5 years
- Higher interest rates and property taxes (among the highest in the U.S.)
- Fewer new homes entering the market due to high construction costs
However, Illinois’ average buyer still earns well above the threshold needed, providing a better chance at mortgage qualification—especially for buyers with stable employment.
Support for First-Time Buyers in Illinois
Illinois offers multiple programs that further increase affordability:
- IHDA (Illinois Housing Development Authority) down payment assistance
- Mortgage Credit Certificates (MCC) for tax relief
- Low or 0% down FHA loan options through local lenders
- Closing cost grants for eligible homebuyers
These can significantly lower upfront barriers and improve loan approval chances for new buyers.
Are you shopping for your first home in Illinois? Have you found the market affordable, or is inventory still limited in your area? Share your experiences in the comments.
Stick with ChicagoSuburbanFamily.com for more housing updates, local price trends, and tips to make smart real estate decisions in Illinois.
