Timely Chicago Multifamily Market Analysis Video Released
A new video analyzing the state of the Chicago multifamily market for the third quarter of 2025 has been published. The analysis is expected to cover current rent growth, occupancy rates, and cap rate movements as the city enters the spring leasing season.
- Chicago's multifamily market demonstrated strong performance in the third quarter of 2025, with the vacancy rate tightening to 4.7%, significantly below the U.S. average of 8.4%. During the same period, annual rent growth reached 3.4%, and by the end of the year, the average asking rent was approximately $1,900 per unit. - Investment activity gained momentum, with year-to-date multifamily sales reaching $3 billion by the end of Q3 2025, a 10% increase from the same period in 2024. Average market-wide cap rates stood at 6.7%, with private buyers dominating the market, accounting for 65% of transactions. - The suburban Chicago multifamily market showed notable strength, with a 40% year-over-year increase in total sales volume through the third quarter of 2025. The average price per unit in the suburbs grew by 4.7% to $146,068, with submarkets like McHenry and Kendall County posting impressive absorption gains. - New apartment construction has slowed to its lowest level since 2012, with only around 11,000 units underway in Q3 2025. This muted development pipeline, with nearly 9,000 units absorbed versus just 4,600 delivered since late 2024, is creating a supply-demand imbalance that supports continued rent growth. - Across the Midwest, cities like Chicago, Cleveland, and Kansas City are experiencing some of the fastest rent growth in the nation, driven by steady demand and limited new supply. Investment strategy in the region is increasingly shifting toward Class B and C workforce housing, which benefits from strong demand and relative affordability. - Institutional investors have historically been underweight in the Midwest, which holds about 20% of the nation's rental housing stock but only 6% of institutional multifamily assets by value. This trend may present opportunities for private investors as the region's properties offer higher initial yields, with Midwest apartment cap rates averaging 45 basis points above the national benchmark over the last two
