Naperville School District 203 has lost roughly 875 students over the last twelve years. As a result, administrators have proposed cutting 97 full-time positions in the 2026-27 budget.
Fewer children now live in the district’s family-sized homes. Yet those houses aren’t being sold to young families who could use the space instead.
Young families usually take the blame for tight housing supply because they compete for the same family-sized homes. Here, the real bottleneck is older owners with nowhere smaller to move.
Empty Nesters Own the Large Homes and Rarely Move Out of Them
Naperville’s median age is 41.5 years, per Census Reporter, well above both the Chicago metro average (38.9 years) and the national average (38.9 years). Only 10.3% of residents moved in the past year. Because owners rarely list, there are comparatively fewer options to choose from. However, interested buyers still explore Naperville homes on Houzeo and other platforms to compare available options across the city.
Income also does not explain the low moving rate. Median household income is $150,360, nearly double the state average. This suggests income alone does not explain why owners stay.
So what keeps owners from selling? The pattern shows up across the broader metro, not just in Naperville. Per Redfin, Chicago-area empty-nest baby boomers (older homeowners whose children have moved out) own 24.8% of three-bedroom-plus homes. Meanwhile, millennial families raising kids own just 15.9% of those larger houses. Nationally, the shares are 28% for empty-nest boomers and 16% for millennial families.
Boomers’ larger homes stay off the market, and sales that depend on them stall too. Demand is steady: homes sell in a median of 49 days and close near list price. Buyers still find little to choose from, because owners won’t list when they have nowhere smaller to go.
Why Owners Stay Even With High Property Taxes
Low mortgage rates are a big reason owners do not sell. Nationally, 53% of mortgaged homeowners carry an interest rate below 4%, per Rocket Mortgage. About 20% still have unicorn rates under 3% locked in during the pandemic.
Trading that cheap loan for a new rate above 6% adds hundreds of dollars to monthly payments. That’s why 61% of surveyed real estate agents call rate lock-in, where owners keep a low rate they would lose by selling, a major or moderate factor that keeps homes off the market.
Naperville’s high property taxes should push homeowners to downsize. According to Ownwell, the median property tax rate is 2.35%, more than double the national median of 1.02%. Annual tax bills across Naperville’s ZIP codes range from roughly $7,800 to over $13,000.
Still, cost is not the only obstacle. “The biggest obstacle with inventory is that sellers don’t know where their next chapter begins. They’re not willing to sell before they’ve found their next home,” Byrne, a real estate expert, says.
Only 1.5 Months of Supply Leaves Sellers Few Homes to Buy
Market data from Houzeo shows Naperville had only 1.5 months of supply in September 2026, meaning every listed home would sell in under two months at the current pace. A balanced market typically has 4 to 6 months. About 32.4% of homes sold above the asking price, and homes closed at 99.87% of list price, so buyers face real competition, but most prices stay close to asking.
Inventory is up only 2.38% from a year ago, so supply has barely improved. Prices keep rising as supply stays tight. The median sale price is $657,500, up 13.36% from a year earlier. Owners who sell a larger home then have few homes to buy.
Naperville’s New Smaller Homes Are Few and Priced Like Large Ones
Some builders are adding smaller homes. M/I Homes is converting former office properties into Northwoods of Naperville, a 64-unit townhouse project aimed at buyers who want smaller homes in the city. But at prices in the $700,000s, these townhomes cost about as much as the larger homes owners would be selling, so downsizers would keep little of the money from their sale.
Building is slow across the metro, too. Chicago-area permits authorized roughly 1,598 new housing units in October 2025 and 863 in December 2025, per FRED. Permits recovered to 1,162 by June 2026, still below the October level.
The cheaper homes are also a different type of home. According to Houzeo, the average Naperville condo costs about $261,400, against $744,250 for a single-family home. Owners who want a smaller house, not a condo, face a much higher price than the condo average. No single 64-unit community can offset a construction slowdown or an affordability gap of that scale.
When Could More Naperville Homes Reach the Market?
Mortgage interest rates will largely decide how long owners keep their larger homes off the market. After dropping to 5.98% in February 2026, the average 30-year fixed rate rose back to 6.77% as of mid-August, per Forbes.
Oil price spikes linked to Middle East conflicts helped push mortgage rates higher again. Forecasters expect mortgage rates to range from 6.3% to 6.5% through 2027, per U.S. News.
A new Redfin and Compass program offers some hope for local inventory. Redfin economists estimate it could lift the inventory by 6% to 12% annually by letting homeowners test a price before formally listing.
Testing a price without committing might be enough to persuade hesitant Naperville sellers to list. Whether that works comes down to two things happening together: rates ease even slightly, and homeowners decide selling now makes sense. If both happen, larger homes could start to reach the market again over the next two or three years.
Until then, owners keep their low rates and still have nowhere smaller to go. Naperville has the income and the buyer demand.
What it doesn’t have is smaller homes that owners can afford to move into, and until rates fall or owners’ plans change, aging homeowners and house-hunting families will stay stuck in a market where prices climb and listings stay scarce.
