National and Chicago Real Estate Market Update - February 2025

Feb 25

National Housing Data & Pricing Dynamics
Recent U.S. housing reports paint a picture of a market gradually rebalancing after years of pandemic‑era volatility. According to the latest S&P CoreLogic Case‑Shiller index data, national home‑price growth slowed sharply in late 2025, with the annual increase dropping to about 1.3%, the weakest since 2011. Some cities, including Chicago, still showed modest gains, while many Sun Belt metros saw outright declines. This mirrors broader data showing existing‑home sales declined roughly 8.4% in January 2026, even as housing affordability improved for the seventh month as mortgage costs remained elevated and supply tight.

Economists and market commentators suggest that housing is slowly shifting toward a more balanced buyer–seller dynamic in 2026. A recent Realtor.com forecast projects price dips in more than 20 U.S. markets next year, noting that buyer leverage is increasing as seller motivation rises and inventory slowly grows. Another housing editorial highlights modest sales growth and flat to slightly positive price trends nationally over the coming year, characterized by continued mortgage rate influences. Mortgage rates themselves have been an ongoing focus: while long‑term averages remain elevated, recent data show 30‑year fixed rates dipping below 6%, a psychological threshold that could help unlock stubborn segments of the market, even though housing stocks have reacted unevenly.

Chicago Market Highlights & Trends
Regionally, the Chicago housing market reflects many of the national patterns. Local multiple listing data show that median home prices remain elevated — with metro figures around the mid‑$300,000s — even as sales volumes softened and inventory remains constrained. Chicago’s median sale price and activity data align with state‑level trends in Illinois, where prices are up modestly year‑over‑year while the number of homes sold has fallen, and days on market are tightening, suggesting persistent demand relative to listings. City neighborhood reports reveal diverse price performance, with areas like West Loop and Lincoln Park showing notable price growth while parts of the urban core remain flat or slightly softer. Meanwhile, industry reports and trade‑association commentary underscore that affordability challenges — tied to high prices, limited supply, and mortgage lock‑in effects — will continue to define Chicago’s 2026 residential landscape unless supply responses accelerate.

Outlook for the Months Ahead
Overall, the past month’s headlines suggest a housing market in transition: price growth decelerating, sales activity mixed, and affordability gradually improving as buyers reassess timing. For Chicago and national markets alike, persistent supply shortages and labor/interest‑rate dynamics will remain key factors shaping market outcomes through the spring selling season and beyond.

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