Illinois’ housing market was one of the weakest in the nation prior to 2020, Illinois Policy reports. If the unemployment rate remains high and if demand does not continue to outpace supply in housing markets across the state, close to 130,000 households could fall behind on their mortgage payments. This means Illinois’ mortgage delinquency rate could double to nearly 9%, the highest since it peaked at 11% during the Great Recession.
Illinois has had the third-lowest housing price appreciation in the United States on average since the end of the Great Recession. Weak housing appreciation is largely tied to declining demand as Illinois continues to experience population decline and more Illinoisans continue to favor renting over homeownership. Despite relatively low home prices and mortgage rates, homeownership is further discouraged by added costs such as property taxes, which are second-highest in the nation.
Other than the cost of their loans, property taxes are often Illinois homeowners’ largest annual housing expense. Recent homeowners likely make the equivalent of nearly seven additional mortgage payments each year because of property taxes. he median Illinoisan with a mortgage pays $4,900 in property taxes on their $203,400 home, a property tax rate of 2.4% (the WalletHub survey includes those without a mortgage and shows Illinois’ property tax rate at 2.3%, both are second highest in the nation). This is the third consecutive year Illinois ranked No. 2 in the property tax survey.
Now that 1.5 million Illinoisans have lost their jobs and income has fallen, many families may fall behind on their mortgage payments. Using data from the Mortgage Bankers Association, the Illinois Policy Institute projection for mortgage delinquency uses the relationship between aggregate unemployment, housing price appreciation and aggregate mortgage delinquency.
"With many Illinois homeowners uncertain about how they will be able to pay the bills, state lawmakers should return to Springfield for a special session to provide relief for these families or more counties should act to delay due dates," said Illinois Policy.