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Prospect Heights, Illinois: Rising Home Values and Shifting Ownership Trends in a Chicago Suburb
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
Loading Content...
Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Prospect Heights, Illinois, a suburban city in Cook County within the Chicago metropolitan area, has experienced significant changes in its housing market over the past decade. This analysis examines the trends in homeownership, rental rates, and property values from 2013 to 2024, highlighting the shifting dynamics of the local real estate landscape.
The homeownership rate in Prospect Heights has shown a notable decline from 2013 to 2022. In 2013, 72% of housing units were owner-occupied, but this figure decreased to 66% by 2022. Conversely, the percentage of renter-occupied units increased from 28% to 34% during the same period. This shift coincided with a significant increase in average home prices, rising from $147,965 in 2013 to $248,825 in 2022, representing a 68% increase over nine years.
The relationship between federal interest rates and homeownership rates in Prospect Heights follows a typical pattern. As interest rates remained low from 2013 to 2021, ranging from 0.08% to 0.40%, the city saw a gradual decrease in homeownership. This trend might be attributed to factors such as rising home prices outpacing income growth, making it more challenging for potential buyers to enter the market despite favorable borrowing conditions.
Renter percentages in Prospect Heights have increased alongside rising average rent prices. The proportion of renters grew from 28% in 2013 to 34% in 2022. During this period, average rent prices also saw an upward trend, increasing from $1,250 in 2013 to $1,396 in 2022, a 12% rise. The city's population remained relatively stable during this time, fluctuating between 24,243 and 23,994 residents, suggesting that the increase in renters was not primarily driven by population growth but rather by shifts in housing preferences or affordability issues.
In 2023 and 2024, the housing market in Prospect Heights continued its upward trajectory. The average home price in 2023 reached $263,752, and by 2024 it further increased to $284,364. This represents a substantial 14% increase in just two years. Concurrently, federal interest rates rose significantly, reaching 5.02% in 2023 and 5.33% in 2024, which could potentially impact future homeownership rates and market dynamics.
Looking ahead, based on historical trends and current market conditions, we can project continued growth in both average home prices and rent prices over the next five years. Average home prices could potentially reach around $340,000 by 2029, assuming a similar growth rate to recent years. Average rent prices might increase to approximately $1,600 per month in the same timeframe. However, these projections are subject to various economic factors and local market conditions.
In summary, Prospect Heights has experienced a notable shift towards renting, with a corresponding decrease in homeownership rates over the past decade. This trend has occurred alongside significant increases in both average home prices and rent prices. The recent spike in interest rates, coupled with the continued rise in housing costs, may further influence the balance between owning and renting in the coming years, potentially affecting affordability and housing market dynamics in this Illinois city.
