Researchers in the Urban Institute’s Housing Finance Policy Center today released new research examining the supply of owner-occupied housing across the Federal Home Loan Bank of Chicago (FHLBank Chicago) District, which includes Illinois and Wisconsin.
The report, Exploring Supply-Side Solutions for Homeownership, finds that Illinois and Wisconsin benefit from relatively strong homeownership rates and lower home prices than the nation overall. However, an aging housing stock, persistently low levels of new construction and limited access to rehabilitation financing are constraining the availability of homes for purchase.
“Understanding the housing needs of communities across Illinois and Wisconsin starts with strong data and input from the members and partners working in those communities every day,” said Katie Naftzger, SVP and Community Investment Officer at FHLBank Chicago. “This research gives us a clearer picture of the challenges affecting homeownership supply and where there may be opportunities to build on the work already underway across our district.”
The research combines housing market analysis with qualitative insights gathered through engagements with FHLBank Chicago members and other housing stakeholders. Urban Institute researchers participated in two regional roundtable discussions with local housing experts and presented their analysis during five FHLBank Chicago Regional Member Insights Forums. Representatives from 152 member financial institutions were surveyed on how the findings aligned with their local markets, the obstacles they face, and the resources that could support greater participation in housing development and preservation.
Key report findings include:
- Preserving existing homes is central to the region’s housing supply. Nearly two-thirds of Illinois homes and more than half of Wisconsin homes were built before 1980, and the region’s older housing stock creates significant rehabilitation needs.
- New construction remains a priority. Members most frequently identified new single-family construction as the greatest opportunity to expand owner-occupied housing supply, followed by rehabilitation of existing owner-occupied homes.
- The barriers extend beyond access to capital. Members identified limited developer capacity, construction risk, and gaps in institutional expertise among the constraints on expanding construction and rehabilitation activity.
“The research shows that expanding homeownership opportunities requires looking at the full housing supply picture, from new construction to preserving and improving the homes that already exist,” said Laurie Goodman, Institute Fellow in Urban’s Housing Finance Policy Center. “Combining market data with perspectives from lenders and housing stakeholders across Illinois and Wisconsin helps us better understand the challenges communities face and the areas that warrant further exploration.”
The report outlines three opportunity areas for further exploration: supporting rehabilitation of existing homes, mitigating risk to facilitate member lending for construction and rehabilitation, and strengthening local capacity.
The findings will inform continued exploration by FHLBank Chicago of approaches that could help expand and preserve the supply of homes for purchase across Illinois and Wisconsin.
FHLBank Chicago funded the research. Consistent with the Urban Institute’s funding principles, the report’s findings and analysis were developed independently by its researchers. Funders do not determine research findings or the insights and recommendations of Urban Institute experts.
Read the full report and explore the findings on the Urban Institute's website.
Hear more about the research, key findings and opportunities for expanding housing supply from the Urban Institute’s Laurie Goodman and FHLBank Chicago’s Katie Naftzger in a new episode of FHLBank Chicago’s Banking on Connections podcast.
About the Federal Home Loan Bank of Chicago
FHLBank Chicago is a regional bank in the Federal Home Loan Bank System. FHLBanks are government-sponsored enterprises created by Congress to ensure access to low-cost funding for their member financial institutions, with a focus on providing solutions that support the housing and community development needs of members’ customers. FHLBank Chicago is a self-capitalizing cooperative, owned by its Illinois and Wisconsin members, including commercial banks, credit unions, insurance companies, savings institutions and community development financial institutions. To learn more about FHLBank Chicago, please visit fhlbc.com.
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Casey Reidy, 312.565.5291
creidy@fhlbc.com
