Chicago’s multifamily market entered 2025 with limited new inventory, and that scarcity only increased throughout the year. 

According to Cross Street’s Chicago Multifamily Annual Market Report, Downtown Chicago delivered just 243 units in 2025, while new construction starts hit a decade–low of 1,395 units because of elevated costs and growing regulatory and tax uncertainty. The construction pipeline ended the year with only 4,131 units under way, well below the 10-year average of 6,380 units. 

The city’s 5.0% vacancy rate is among the lowest for major U.S. metros, sitting 350 basis points below the U.S. average of 8.5%, and every submarket posted rent growth above the national average in 2025.  

Chicago mirrors the national trends, with apartment supply pipelines contracting at the fastest pace in more than a decade. In 2025, just 520,332 units were delivered across the U.S., down 25.8% from 2024, while the average number of units under construction as a share of inventory fell to 2.7%. 

Adaptive reuse is a key driver 

With ground-up development constrained, adaptive reuse projects are now central to the Chicago pipeline. Downtown alone has 806 adaptive reuse units scheduled for delivery in 2026, with another 3,921 units proposed. Over 45% of all units are expected in the next two years. In the neighborhoods, 894 adaptive reuse units are in the pipeline, led by Uptown (328 units) and Lakeview (362 units), most of which will deliver in 2027.  

Cross Street emphasizes that “adaptive reuse is increasingly important in bridging the supply gap.” 

Population growth 

Unlike many U.S. metros facing oversupply, Chicago’s market benefits from a diverse economy, high renter demand and population growth. After years of decline, the city added an estimated 22,000 residents in 2024, and downtown’s population has more than doubled since 2000, making it the fastest-growing downtown in the country. 

Chicago also ranks No. 1 in corporate relocation and expansion for the 12th consecutive year, boasts a cost-of-living index of 64.6, and draws from a highly educated workforce producing 190,000 graduates annually from local and nearby Big Ten universities.  

According to the Central Area Plan 2045, the downtown population is projected to increase by 98,000, reaching over 300,000 residents by 2045, and the area is expected to add 161,000 jobs. As a result, there will be a demand for 59,500 to68,500 new residential units, which equates to roughly 2,880 to 3,310 units annually. 

Looking ahead 

Cross Street projects 1,664 new units downtown in 2026, with 806 units coming from adaptive reuse, and up to 4,378 units potentially delivering by 2027. However, these figures assume all projects secure approval and financing.  The West Loop and Fulton Market continue to lead the city in total units proposed. Much of that proposed pipeline is concentrated in the West Loop and Fulton Market, which continue to lead the city in total units planned. 

Meanwhile, barriers to homeownership are reinforcing rental demand. Median home prices now require 43% of the median income nationally, and local listings in Chicago have dropped 46% over five years, pushing more renters into the market. At the same time, Chicago’s annual increase in home values reached 5.9%, a growth rate second to New York City. Homes are selling at 101% of list price with a median of just 34 days on market.