Chicago Home Sales: Will the Market Wake Up in 2025?

Will the Market Wake Up in 2025?

Chicago’s housing market is holding steady — but it’s far from booming. The latest numbers from the National Association of Realtors (NAR) show that nationwide existing-home sales in May were just 0.7% lower than a year ago. That’s not a dramatic drop, but sales overall have been stuck at around 75% of pre-pandemic activity for the past three years.

Here in Chicago, we’re seeing the same story play out. Buyers are out there — plenty of them — but many are waiting on the sidelines for a break in mortgage rates. According to NAR Chief Economist Lawrence Yun, that pent-up demand could be unleashed quickly if rates take a meaningful dip. “We’ve added millions of jobs to the economy, so the housing demand is there. It just hasn’t been realized yet,” Yun explains.

The 2025 Forecast for Chicago Real Estate

Unfortunately, a rate drop isn’t looking likely in the immediate future. Selma Hepp, Chief Economist at real estate data firm Cotality, expects rates to remain elevated throughout 2025, keeping Chicago’s market in a “slow and steady” mode.

That means two things:

• Affordability will remain a challenge for many buyers, especially first-time homeowners in neighborhoods like Bronzeville, Avondale, and Logan Square where prices have steadily risen.

• The lock-in effect will keep inventory tight as sellers with 3–4% mortgages hesitate to trade up and take on higher monthly payments.

What Chicago Buyers and Sellers Should Know

If you’re a buyer, the best move is to stay prepared. The moment rates drop — even slightly — competition will spike, especially in desirable neighborhoods with low housing supply. If you’re a seller, limited inventory is still on your side, but pricing your home correctly will be critical to attracting serious offers in a market where buyers are cautious.

Bottom line: Chicago’s housing market isn’t crashing — it’s in a holding pattern. Unless mortgage rates fall, expect a measured pace well into 2025. But when rates shift, Chicago’s market could heat up quickly.