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Report: housing indicator shows Chicago market at strongest level in seven years

The data shows strong performances by some — but not all — Chicagoland counties

Recently released data shows the number of new housing starts — ie the number of privately-owned new houses or dwelling units which start construction — in the Chicago metropolitan area hit 6,250 during a twelve month period ending in the second quarter of 2016. This figure translates to a year-over-year increase of 5.6% and represents the strongest performance seen by the Chicago area market in seven years. While it’s important to recognize that housing starts are just one of many economic indicators, the latest report by Metrostudy paints a generally positive picture.

That said, the region’s total number of home starts only tells part of the story for a metropolitan area that encompasses a wide geographic area. For example, the latest numbers highlight the strongest growth in Illinois’ Cook, Kane, and Will counties as well as Indiana’s Lake County. Of the twelve counties surveyed over the twelve month period, these four accounted for 72% of Chicagoland home starts. Meanwhile, five other counties (including Will and McHenry) experienced a year-over-year decline.

While Chicagoland’s most desirable areas accounted for much of this new growth, increasing land values and a shortage of new lot availability in these attractive submarkets is also expected to keep future growth somewhat in check. It’s for these reasons that Metrostudy forecasts year-over-year new home starts through the remainder of 2016 to range from 6,200 to 6,500 and grow at a rate of 6% to 8%. Encouraging, but nothing too crazy.