The Rockford region’s housing market broke three records in 2023

By Kevin Haas
Rock River Current
Get our mobile app

ROCKFORD — The housing market in the Rockford region broke three records last year, including the highest ever annual average sales price.

The region also saw its lowest ever housing inventory and it was the fastest pace for homes to sell once hitting the market.

More news: Meet the 101-year-old woman who will be Hard Rock Casino’s first guest in Rockford

The new records were largely driven by rising mortgage rates, which made 2023 one of the toughest years to buy a house, according to the Northwest Illinois Alliance of Realtors.

However, the combination of high sales prices, a fast pace of sales and low inventory will make 2024 another good year for sellers, said Conor Brown, CEO of the Realtors group.

“Adding up all the market indicators point to one fact: This is still a strong seller’s market,” he said. “If you’re looking to make a move in housing, this is the year.

“There has been a $54,400 jump in home prices in the last five years. Plus, homes are selling in less than three weeks, half the time it took three years ago. It doesn’t get much better than that for sellers.”

Home sale prices rose 7% from an average of $179,867 in 2022 to $192,431 last year. The highest-ever price in a single month came in August, when home sales peaked at $205,198.

“We really are seeing wonderful appreciation throughout the Rockford region,” Brown said. “Our homes are continuing to sell at a rapid clip.”

Homes sold on average in 20 days last year. That’s one day faster than the previous record pace in 2022. Five years ago it took an average of nearly 53 days for a house to move off the market.

The high prices and fast pace are in part driven by the record low inventory of homes for sale.

There were an average of 283 homes for sale each month in 2023. That’s a nearly 24% drop from an average of 370 homes on the market monthly in 2022. In 2019, there was an average 1,029 homes for sale each month.

The inventory shortage is caused, in part, by high mortgage rates. Those rates neared 8% in October, the highest rate since 2000. That led to fewer people being willing to sell because they feel locked into a lower mortgage rate than one they can get if they sell and buy a new home, Brown said. Rates were sub-3% in 2023.

Mortgage rates stood at an average of 6.69 percent last week, according to Freddie Mac. They’ll need to continue to fall below 6% for homeowners to be see a better opportunity to sell and buy something new.

“I think that’s going to be a lot more palatable for those current homeowners who are really thinking about moving but they’re locked in their current home because they don’t want to give up that super low interest rate,” Brown said. “If that can happen, I think that helps break a little bit of the log jam that we’ve seen.”

Mortgage rates in the modern era peaked in October 1981 at 18.63%, according to Freddie Mac data.

Brown said the region also needs to see more home construction. Homebuilding here has never recovered since the Great Recession.

“We’re going to be adding a lot of new jobs here in the region, whether it’s the casino or Stellantis, and we’re going to need new housing for these folks,” Brown said.

Brown said that Rockford’s housing market made better gains in the past year than the state as a whole. In Rockford, home sale prices rose 7% compared to 3.5% statewide, and homes sold faster here than the rest of the state and the country. The average time on the market was 29 days in Illinois and 24 across the nation.

“Rockford continues to have one of the most affordable housing markets in the country,” Brown said. “Homes in Illinois cost 40% more than Rockford and homes across the nation sell for more than double the Rockford average. … No wonder our demand remains strong.”

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on X at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas