Chicago Median Home Prices Rise to $365K in December 2025, Up 4.3% Amid Tight Inventory

Chicago's Real Estate Market Sees Median Prices Reaching $365K in December 2025

The Chicago real estate market has witnessed a significant surge in median home prices, rising to $365,000 in December 2025, marking a 4.3% increase year-over-year. The price per square foot has also increased by 5.3%, reaching $260. Despite higher mortgage rates, currently averaging 6.18%, the city saw 1,939 homes close, indicating strong demand. Homes are now selling in an average of 67 days at 98.5% of the list price, underscoring a robust seller's market. This trend points to continued upward pressure on prices as we move into February 2026.

Impact of Limited Inventory on Chicago's Housing Market

The tight inventory levels in Chicago have played a crucial role in driving up property prices. As of December 2025, available housing units were limited, which has fueled competition among buyers. According to Chicago Agent Magazine, the city is experiencing an inventory decline that compounds the pressure on prospective buyers. With fewer homes on the market, bidding wars have become more common, pushing prices up and increasing urgency among buyers to secure properties before rates potentially rise further.

Regional Comparisons: Chicago vs. Other Major U.S. Cities

Compared to other major U.S. cities, Chicago's real estate market shows a unique resilience. While cities like San Francisco and New York are experiencing a plateau in home prices, Chicago's market remains buoyant. As detailed in FixnList, Chicago's price increase outpaces the national average, partly due to its diverse economic base and appeal to international investors. The limited inventory is a common theme across many cities, but Chicago's strategic importance as a midwestern hub gives it a competitive edge.

Chicago's price increase outpaces the national average, partly due to its diverse economic base and appeal to international investors.

Stakeholder Perspectives: Insights from Real Estate Professionals

Local real estate experts are optimistic about the market's continued strength. According to Chicago Home Partner, the market's resilience is bolstered by steady demand and the city's economic sta

"Chicago remains a prime location for real estate investment due to its strong market fundamentals," notes Maya Tarek, Senior Analyst at RealEstateAbroad.com.

bility. "Chicago remains a prime location for real estate investment due to its strong market fundamentals," notes Maya Tarek, Senior Analyst at RealEstateAbroad.com. She emphasizes the importance of strategic investments, particularly in upcoming neighborhoods that promise growth potential.

Mortgage Rates and Their Influence on Buying Power

Despite an increase in mortgage rates to 6.18%, buyer interest in Chicago remains high. The rising rates have, however, affected affordability, prompting many to reconsider the size and type of properties they can purchase. The Illinois Realtors Association forecasts a modest increase in inventory, which might ease some pricing pressures, but the demand-supply gap continues to sustain elevated prices. Investors are advised to secure financing early and evaluate properties that offer greater value per square foot.

Future Implications for Chicago's Real Estate Market

Looking ahead, Chicago's real estate market is poised for steady growth. The combination of tight inventory, resilient demand, and strategic investment opportunities positions the city as an attractive destination for both domestic and international investors. RealEstateAbroad.com analysis suggests that new developments and infrastructure projects could further enhance property values. As February 2026 unfolds, potential buyers and investors are advised to act swiftly to capitalize on the current market conditions.