How to buy a home in Illinois

Illinois is famous for its lakefront cities, national forests, and rolling hills, attracting home buyers from across the country and beyond. From Chicago’s iconic neighborhoods to quieter suburbs and charming small towns, Illinois offers a range of affordable housing options.

Buying a house in Illinois has a few unique considerations, from higher property taxes to housing inventory. Here’s what to know so you can feel confident and prepared every step of the way to find your dream home.

A quick glance at Illinois’ housing market

The market in Illinois is generally more affordable than the national average, which is $439,869, though prices vary depending on the region. Here’s an overview of the Illinois housing market, as of October 2025.

Illinois real estate market trends

In Illinois, home prices are generally more affordable, but this depends on the city you’re looking to buy in.

Home prices

The median home sale price in Illinois is 29% lower than the national median, per Redfin’s October housing market data. Illinois’ home prices have increased slightly, up 1.3% compared to last year, though the picture changes depending on the neighborhood. You can use the Rocket Mortgage home affordability calculator to estimate how much you can afford in different areas.

Housing demand vs. inventory

Illinois has a good job market with an unemployment rate of 4.4.% as of August 2025, the same as the national average. The state has the fifth-highest GDP in the nation, with popular industries including manufacturing, agricultural technology, and life sciences. The state’s distinct seasons and lakefront communities appeal to those looking for an outdoor lifestyle.

Inventory has tightened across the state, which can cause prices to increase in certain areas. It’s estimated that the state will need 227,000 additional housing units in the next five years to keep up with demand. The good news is that each city’s housing market is different. So it’s important to work with an experienced agent who can help you navigate the local market.

Home buying seasons

Home sales in Illinois usually peak during the spring and summer months, with more available listings and buyers. Buying a home in the early fall to winter months could leave you with less competition and lower prices. However, depending on the local market, there could be fewer homes for sale during the off-season. There’s no universal best time to buy a house, as it depends on your personal goals.

Top places to buy a home in Illinois

If you’re contemplating where you should live in Illinois, here are six popular cities to discover.

Chicago

Located along the southwestern shore of Lake Michigan, Chicago is Illinois’ biggest city. Chicago is a great place to live if you’re looking for a vibrant city with historic and modern neighborhoods, a strong job market, and world-class museums and landmarks. Its impressive food scene, waterfront parks, and rich architectural heritage add to the city’s appeal.

• Population: 2.7 million*
• Median household income: $80,613*
• Median home sale price: $380,000

*United States Census Bureau

Aurora

One of Chicago’s western suburbs, Aurora is a business, cultural, and entertainment hub. Located next to the Fox River, Aurora gives residents access to riverfront recreation, historic downtown attractions, and community events throughout the year. The city also provides easy access to nearby areas like Naperville, Oswego, and Batavia.

• Population: 180,500*
• Median household income: $97,784*
• Median home sale price: $332,000

*United States Census Bureau

Naperville

Naperville is located just west of Chicago and is known for its top-rated schools, family-friendly neighborhoods, and vibrant downtown. This suburb is a great option for those working in the Chicago area but looking to live in a smaller city. While more expensive than some areas, you can find more affordable towns close by, like Lisle or Warrenville.

• Population: 149,500*
• Median household income: $150,360*
• Median home sale price: $547,500

*United States Census Bureau

Joliet

Joliet is a southwestern suburb of Chicago, located along the Des Plaines River. With job opportunities in the education and medical sectors, higher education, and entertainment venues, Joliet is a great place for those seeking new opportunities and families looking to settle down. The city’s riverfront parks, forest preserves, and convenient access to Chicago contribute to its growing appeal for Illinois home buyers.

• Population: 150,300*
• Median household income: $103,163*
• Median home sale price: $305,000

*United States Census Bureau

Rockford

Rockford is one of the major cities in northern Illinois, close to smaller communities like Loves Park, Machesney Park, and Belvidere. The area is surrounded by forest and nature preserves, rivers, and parks, making it a popular spot for hiking, boating, and golfing. Rockford has a growing manufacturing and healthcare sector, if you’re hoping to relocate to the area for work.

• Population: 148,600*
• Median household income: $52,564*
• Median home sale price: $171,250

*United States Census Bureau

Elgin

Elgin is a popular Chicago suburb, located northwest of the city. The home prices in Elgin are generally lower than those in Chicago. So it’s an awesome place to buy a more affordable home that still gives residents easy access to the greater Chicago area.

• Population: 114,700*
• Median household income: $101,861*
• Median home sale price: $327,500

*United States Census Bureau

Steps for buying a house in Illinois

If you’ve decided to buy a house in Illinois, we’ll guide you through each step of the process below.

1. Prepare your finances

The first step when buying a house is to prepare your finances, check your credit score, and set your budget. You want to know that you have enough funds to cover a down payment and closing costs.

• Check your credit score
• Learn your debt-to-income ratio
• Determine your budget by using a mortgage calculator to see how much you can afford in different cities.
• Save for a down payment
• Plan for closing costs

2. Explore mortgage options

There are various home loans available if you’re buying a home in Illinois.

• Conforming conventional loans. These loans typically require a minimum 3% down payment, and are offered by private lenders. You’ll have to pay private mortgage insurance (PMI) if your down payment is lower than 20%.
• Jumbo loans. These are conventional loans that exceed conforming loan limits. They usually require a higher credit score, down payment, and additional cash reserves.
• FHA loans. These are government-backed loans through the Federal Housing Administration. These loans offer lower down payments depending on your credit score.
• VA loans. These loans are for qualifying service members and surviving spouses and require no down payment. They are backed by the Department of Veterans Affairs.
• USDA loans. These loans are for home buyers in qualifying rural areas, with no down payment requirement. They are backed by the U.S. Department of Agriculture.

Illinois also offers first-time home buyer loans and down payment assistance programs through the Illinois Housing Development Authority. If you qualify for one of these programs, it could reduce your down payment amount or closing costs, making it easier to buy your first home. Keep in mind that not all lenders accept all programs.

3. Get preapproved

A mortgage preapproval helps determine how much you can borrow for a home. Getting a preapproval at the beginning of your home search can help you stand out in a competitive market.

Lenders look at your credit score, income, and assets to determine what loans you could qualify for, current interest rates in Illinois, and overall loan terms. The process typically takes only a few days.

4. Find a reputable Illinois real estate agent

A knowledgeable local agent is invaluable in Illinois, and there are plenty of ways to find a real estate agent, such as on Redfin.com. In Illinois, dual agency is allowed if both parties have written consent. Dual agency allows one agent to represent both buyers and sellers in the transaction. Be sure to ask your agent before signing a buyer's agent agreement.

5. Start shopping for homes in Illinois

Once you’ve narrowed down your search to an area that fits you and your family’s needs, it’s time to begin looking at homes for sale.

You and your real estate agent should work together to find listings on the MLS and sites like Redfin, and attend open houses.

Ask questions like:

• How far is the commute?
• Is there public transportation nearby or major roads and highways?
• Are there parks, shopping centers, and restaurants nearby?
• Does the neighborhood have HOA fees? If so, what is the cost?
• What school district is the neighborhood located in?
• What are property taxes like in the city?

6. Make an offer and negotiate

Your real estate agent will guide you through making an offer on a house in Illinois. You’ll need to decide how much to offer, what contingencies to include, and the earnest money deposit amount. Earnest money shows you’re serious about buying the home. It’s usually 1% – 3% of the home price that’s applied to your down payment later.

Your offer might be accepted or rejected, or you might need to negotiate. Keep in mind that you don’t have to negotiate the home’s purchase price; you can negotiate seller concessions, contingencies, or change the closing date.

7. Proceed to close on your Illinois home

Once your offer is accepted, you’ll:

• Submit your earnest money deposit
• Apply for your mortgage
• Schedule your home inspection and appraisal
• Review your Closing Disclosure
• Prepare for closing day

In Illinois, closing costs often range from 3% – 6% of the purchase price. Closing costs typically include loan origination fees, home inspection fees, escrow fees, home insurance, and possible property taxes.

FAQ about home buying in Illinois

Now that you know how to buy a house in Illinois, here are some of the top frequently asked questions about the process.

Can I buy a house in Illinois if I have bad credit?

Yes. An FHA loan may be an option if your credit needs improvement. Just keep in mind that lower credit scores could potentially lead to higher interest rates, a higher down payment, and fewer loan options.

Is buying a home in Illinois a good investment?

Illinois’ affordable home prices, strong economy, and job opportunities could make it a good investment for you, though you’ll want to consider the state’s high property taxes.

How much are property taxes in Illinois?

On average, the effective property tax rate in Illinois is 2.07%, the second highest in the nation. Local rates can vary by city and county.

Are there any specific factors that could affect the home buying process in Illinois?

Illinois’ decreasing home inventory could mean there’s more competition when buying a home. It’s also more common to work with a real estate attorney when closing the sale.

How long does it take to buy a house in Illinois?

After your offer is accepted, it typically takes about 30 to 60 days to close on a home. Other factors, like home inspection issues and loan approval, can impact this timeline.

The bottom line: The Prairie State has a home for you

Illinois has more affordable homes compared to the national average, access to job opportunities, big cities, and lakefront recreation. Working with an experienced Illinois real estate agent can help you through the nuances of buying a home and find the right city to call home.

If you’re ready to buy a home in the Prairie State, start the mortgage approval process with Rocket Mortgage® for a personalized plan that fits your financial goals.

Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

Rocket Mortgage is not acting on behalf of FHA or HUD.

The 3% down payment option is only available on certain conventional loan products and is not available in all states. Additional terms and conditions may apply.

This article is for informational purposes only and is not intended to provide financial, investment, or tax advice. You should consult a qualified financial or tax professional before making decisions regarding your retirement funds or mortgage.