After record home sale prices last year, here’s how Rockford-area Realtors see 2025

By Kevin Haas
Rock River Current
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ROCKFORD — Home sellers saw one of the largest ever gains in equity in one year in 2024.

And yes, local Realtors are forecasting that prices will continue to climb in the coming year.

Those were two of the takeaways on Thursday as Conor Brown, CEO of the NorthWest Illinois Alliance of Realtors, delivered a year-end recap and look ahead at 2025 for the housing market in Boone, Winnebago and Ogle counties.

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Homes sold for an average price of $215,666 in 2024, that’s a 12% increase from the average of $192,431 in 2023. The record high monthly sales price average came in September, when homes went for $224,406.

Buyers shouldn’t expect to see home prices fall in 2025, Brown said.

He said that while mortgage rates are expected to ease — possibly settling in the 6% range from their roughly 7% mark now — home sale prices are likely to continue to grow, albeit at a slower pace than recent years.

“If you average the expert forecasts to ether, you’ll see prices are expected to go up roughly 3% next year, with most of them hitting somewhere in the 3-4% range,” Brown said. “And that’s a much more typical and sustainable rise in prices.”

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The past year’s record high prices are coming with a change in the profile of who is buying homes here.

All-cash buyers have surged to record highs, accounting for 26% of all home sales in the region over the past year, according to the NorthWest Illinois Alliance of Realtors.

The high prices are also making it difficult for first-time home buyers, especially younger buyers who are being squeezed out of the market by all-cash buyers and people moving here from places like the western suburbs in hopes of finding less expensive housing than Chicagoland.

Those factors played a role in the median age of first-time home buyers rising to an all-time high of 38.

The bulk of buyers are living between Belvidere and Freeport, Brown said, but there’s been an influx of buyers coming here from outside the region because of its relative affordability.

“That’s a new phenomenon that not only validates the great value in our housing stock, but also the many lifestyle benefits from living here like less congestion, less stress and an easier way of life,” Brown said.

Homes across Illinois, on average, cost 30% more than Rockford and homes across the national sell at more than double the Rockford average, Brown said.

“Rockford continues to have one of the most affordable housing markets in the country,” he said. “As national media has noted, we’ve known for quite awhile, Rockford has become a magnet for homebuyers seeking affordability and incredible values.”

The Rockford housing market had the national spotlight multiple times over the past year:

• In April, Rockford was named the nation’s top housing market by the Wall Street Journal and Realtor.com, a turnaround from its label as the underwater mortgage capital of the world a decade earlier.
• In December, Rockford was named the “hottest” housing market on Realtor.com based on views per property and the pace at which homes are sold. It was in the Top 10 on that list several times during 2024 and in the Top 20 every month.
• U.S. News & World Reports last summer ranked Rockford at No. 20 on its list of the best cities to buy an affordable home. Peoria (No. 16) was the only other Illinois city to make the list.

“It was certainly an exciting year for the Rockford region. We had a very dynamic real estate market with record-high prices, the first rise in housing inventory in over a decade and an unprecedented amount of national accolades from many different publications,” Brown said.

Last year was the first time in a decade that the inventory of homes for sale increased year over year. There were 3,581 properties for sale in 2024, about 200 more than 3,390 in 2023.

Inventory has been low as homeowners have opted to stay locked in to low mortgage rates rather than buy a new property and pay substantially higher interest. The low inventory and high demand has led to ever-increasing prices here.

The Rockford region will need more homes for sale and more construction of new homes for the market to remain affordable in the future, Brown said.

“We’re starting a little bit more of that coming online in 2024 and we hope to continue the momentum in 2025, but it has not been anywhere to meet demand,” Brown said.

Fast facts

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