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Peoria's Housing Market: Rising Home Values and Ownership Trends Along the Illinois River
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
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Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Peoria, Illinois, a vibrant city along the Illinois River, has experienced notable shifts in its housing market over the past decade. With a population of 109,221 in 2022, Peoria has seen fluctuations in homeownership rates, average home prices, and average rent prices. This analysis will explore these trends and their interrelationships.
The homeownership rate in Peoria has shown variability, ranging from 53% in 2013 to 61% in 2021. Concurrently, average home prices have demonstrated an interesting trajectory. In 2010, the average home price was $95,944, which gradually declined to $88,090 by 2019. However, a significant upturn began in 2020, with prices rising to $110,221 by 2022, marking a 25.1% increase from the 2019 low.
The relationship between federal interest rates and homeownership rates in Peoria reveals some correlation. As interest rates remained low from 2010 to 2015, hovering around 0.1% to 0.18%, homeownership rates fluctuated between 53% and 58%. When interest rates began to rise in 2016, reaching 1.83% by 2018, homeownership rates showed more stability, maintaining between 54% and 60%. This suggests that while low interest rates generally encourage homeownership, other local factors also play a significant role in Peoria's housing market dynamics.
Renter percentages in Peoria have inversely mirrored homeownership rates, ranging from 39% to 47% between 2013 and 2022. Average rent prices have shown an overall upward trend during this period. In 2013, the average rent was $698, which increased to $919 by 2022, representing a 31.7% rise. Notably, there were some fluctuations, with a peak of $826 in 2018 before a temporary dip to $759 in 2019. The increase in average rent prices, despite some variations in the renter population, suggests a tightening rental market in Peoria.
Looking at the most recent data, the average home price in Peoria reached $115,675 in 2023 and further increased to $123,602 in 2024. This represents a significant 12.1% rise from 2022 to 2024. Concurrently, federal interest rates climbed to 5.02% in 2023 and 5.33% in 2024, marking the highest levels in over a decade. These higher interest rates may impact future homeownership trends and affordability in Peoria.
Projecting future trends, the housing market in Peoria is likely to continue its upward trajectory. Based on the observed patterns, average home prices could potentially reach around $140,000 to $150,000 within the next five years. Average rent prices may also continue to rise, potentially reaching $1,100 to $1,200 per month in the same timeframe. However, these projections assume a continuation of current economic conditions and local market factors.
In summary, Peoria's housing market has shown resilience and growth, particularly in recent years. The city has experienced a notable increase in average home prices since 2020, alongside a gradual rise in average rent prices. Homeownership rates have remained relatively stable despite fluctuations in interest rates, indicating the influence of local economic factors. The recent surge in both home prices and interest rates suggests a dynamic period ahead for Peoria's housing market, with potential implications for affordability and market accessibility.
