Chicago’s Multi-Family Rental Market: Rising Rents, Tight Supply, and Investor Opportunity

Chicago has recently made national headlines for its resilient rent growth, even as many other U.S. cities face rent declines. With limited new construction, tight occupancy, and a high level of demand for urban living, this upward rental trend is expected to continue through 2025 and beyond.

While Chicago remains more affordable than some coastal markets, investors and renters alike are facing new pressures—from a shrinking supply of units to increased competition for leases.

Here’s a closer look at what’s driving the apartment rental market in Chicago right now:

Rising Rents in the Urban Core

Rents across Chicago are projected to continue rising, with some forecasts estimating a return to historical averages of 3.5% annual growth.

This trajectory is being fueled by:

• Sustained demand for centrally located, transit-accessible housing

• Seasonal leasing momentum during spring and summer

• Limited construction activity, which keeps inventory tight

For investors, this trend points to continued rent appreciation potential and stronger year-over-year NOI performance.

High Occupancy and Leasing Velocity

Chicago apartments are leasing quickly, with an average of eight applicants per unit.

High occupancy rates signal:

• Low vacancy risk for landlords

• Limited tenant turnover

• Strong rent collection consistency

This environment favors well-positioned owners with updated or well-managed properties.

Limited Pipeline of New Multi-Family Supply

The pipeline of new multifamily units in Chicago is shrinking. In 2025, new completions are expected to decline sharply, making it one of the tightest supply periods in recent years.

Less supply = more pricing power for landlords—especially in high-demand submarkets like:

• Lakeview

• Logan Square

• Bronzeville

• Edgewater

This imbalance between supply and demand could continue pushing rents upward in the near-to-mid term.

Increased Competition Among Renters

As available units decline, competition for leases is intensifying across all property types.

This is especially evident in Class B/C workforce housing, where demand far outpaces supply.

• Expect shorter days on market

• Higher deposit security

• Lower vacancy loss

Multi-family operators with renovated products in accessible neighborhoods are seeing the most benefit.

Spotlight: Suburban Chicago Rental Market

It’s not just the city center seeing pressure—suburban Chicago is now one of the most competitive rental markets in the country, according to national rankings.

Suburbs with Metra access and quality school districts—like Oak Park, Evanston, Berwyn, and Naperville—are seeing:

• Elevated rent growth

• Extremely low vacancy

• Long waitlists for quality units

This trend creates opportunities for suburban value-add investors and new build-to-rent developers.

June 2025 Average Rents in Chicago

Here’s a quick look at where average monthly rents stand:

• Studio Apartments: $1,872

• One-Bedroom Apartments: $2,524

• Two-Bedroom Apartments: $3,142

• Overall Citywide Average: $1,929

That’s roughly 22% higher than the national average of $1,577/month, highlighting Chicago’s relative strength in the current rental market

Chicago's Multi-Family Rental Market - Final Takeaway

Chicago's Multi-Family Rental Market is defined right now by strong rent growth, limited new inventory, and renter competition, making it a strategic window for existing landlords, value-add investors, and developers.

If you’re looking to acquire, refinance, or evaluate opportunities in this environment, let’s connect. At Triton Realty Group, we specialize in helping investors make sense of Chicago’s submarket dynamics and act decisively.