If you’ve been wondering why home prices are still sky-high—even as interest rates have climbed and buyers are more cautious—you’re not alone. Many homeowners in Rockford, Hoffman Estates, Belvidere, and across Illinois are shocked that prices haven’t dropped like they expected.
In fact, home prices in many areas are still rising, and supply remains tight. So what’s going on? Whether you’re thinking about selling or just trying to make sense of today’s market, here’s what you need to know.
1. The Lock-In Effect Is Keeping Inventory Low
One of the biggest reasons for today’s high prices is what economists call the lock-in effect. Millions of homeowners locked in ultra-low mortgage rates (under 3%) during 2020 and 2021. Now that rates have doubled, they’re staying put.
This means fewer homes are hitting the market, and when inventory is tight, prices tend to stay elevated—even if demand drops.
Bottom line: Sellers aren’t selling, so buyers have fewer choices. Less inventory = higher prices.
Want to move but stuck with a low mortgage rate? Here’s how to navigate that.
2. New Home Construction Still Hasn’t Caught Up
After the 2008 housing crash, homebuilders pulled back—and never fully recovered. Fast forward to today, and we’re still dealing with a shortage of homes. Permits, labor shortages, and higher construction costs have made it harder to build fast enough.
Even with new builds going up in places like Hoffman Estates and Belvidere, it’s not enough to meet demand, especially with population growth and shifting housing preferences.
This shortage keeps resale home values strong, especially in suburban markets where buyers are still looking for space and affordability.
3. Demand Is Still Strong, Especially Among Millennials
Millennials (those born between 1981–1996) are now the largest group of homebuyers. Many are entering their peak homebuying years—and they want homes, even if rates are higher.
Plus, remote work has changed priorities. People are moving out of city centers and looking for space. Towns like Rockford, Machesney Park, and Belvidere have seen increased demand from Chicago-area buyers looking for more house at a better price.
4. Investors Are Still Active
Another factor? Real estate investors. Even with rates up, many cash buyers and institutional investors are still purchasing properties—especially single-family rentals.
This investor activity helps support prices and keeps competition fierce for available homes.
If you’re considering selling a rental property with tenants, this guide explains how to do it right.
5. Inflation and High Replacement Costs
Inflation has increased the cost of materials, labor, and land—making it more expensive to build or renovate homes. These higher costs are passed on to buyers.
Even buyers who want a fixer-upper are discovering that remodeling costs can be sky-high. That makes move-in-ready homes more desirable, and even outdated homes are commanding higher prices.
Can’t afford to fix your home before selling? Here’s what you can do.
What This Means If You’re Thinking of Selling in Illinois
If you’re a homeowner in Rockford, Hoffman Estates, or Belvidere, the current market can work in your favor—especially if your house needs work.
While some buyers are backing out due to interest rates, cash buyers like Modern Times Homes LLC are still actively buying homes in any condition. If you’ve been waiting for the “right time,” this might still be it.
Here’s why:
- You likely have more equity than you think.
- You don’t have to make repairs or clean up to sell.
- You can close quickly and move on your timeline.
Final Thoughts
The housing market in 2025 is complicated—but the fundamentals are clear: low inventory, high demand, and limited new construction are keeping home prices high.
If you’re thinking about selling but overwhelmed by repairs, timelines, or rising rates, we’re here to help.
At Modern Times Homes LLC, we help homeowners across Illinois sell fast, sell as-is, and skip the hassle.
📞 Call us today at 815-974-0359 or visit ModernTimesHomes.com to get your free cash offer—with no pressure, no fees, and no obligations.
Looking for more homeowner tips? Check out our blog on selling inherited homes in Illinois.