Chicago Dead Last Among Major U.S. Metros on Building New Homes

According to data released by Construction Coverage, an analytics service for building and real estate professionals, Chicago has ranked last among the top metro areas in the county for the number of new homes built in 2024. Last year, the Chicagoland municipalities authorized 4.5 new homes for every 1,000 existing residential units. That’s less than half the nationwide figure, which stood at 10.1 permits for every 1,000 existing homes, and about five times less than Dallas, the leading metro area, which authorized 22.2 new homes for every 1,000 existing homes.

Nationwide, there has been “a persistent shortage of housing [that] has fueled an ongoing affordability crisis,” according to the Construction Coverage’s Jonathan Jones. New home construction is too slow to fill the need for homes, especially with recent inflation for land, labor, and materials. President Trump’s tariffs also have builders hesitant to start new projects.

On a smaller scale, Chicago has been seeing low population growth, reducing the need for new homes. Despite the U.S. Census Bureau reporting that the Chicago-area population has grown over the past two years, throughout the 2010s, the population barely changed, growing only about 1.4%.

Additionally, because of the state’s high level of regulation on zoning, permitting, and other aspects of construction, there are many obstacles to building. Updating the zoning of older properties for 2025 can be a tedious process. Jeff Benach, principal of Chicago-based Lexington Homes, says that builders are frustrated with the regulatory climate. Samantha Porter, a Jameson Sotheby’s International Real Estate agent, says that zoning procedures in other states, like Michigan, are simple and inexpensive. When compared to Chicago, specifically Chicago’s Northwest Side Housing Preservation Ordinance, a gentrification-fighting effort, the process is far more burdensome and time-consuming.

In December of 2024, in an attempt to fight this issue, Governor JB Pritzker announced a legislative initiative aimed at reducing barriers to new construction across the state. He said, “If we are going to build on this state’s record of growth and prosperity, lower costs for Illinois’ working families, and be a state that everyone can call home, we must build more housing in every Illinois community.” While some progress has been made, no measures have yet been passed to advance this effort.

While new homes would likely make housing more affordable, many are looking less while they await lower prices.