Chicago Multifamily Market Report
2024 Investment Forecast
Home Affordability Hurdles Sustain Rental Absorption;
Investors Favor Education Corridors
Suburban apartment demand mirrored by recent employer office commitments. Since late 2023, employers like Travelers Insurance, Hartford Insurance, AIT Worldwide Logistics and The Federal Aviation Administration have moved into offices in Chicago’s suburbs. These decisions are a reflection in part of the current employees already living nearby. Corporate expansions should aid further apartment demand nearby as workers not already local to the area are directed to adjacent residential areas in order to cut down on commutes. Oak Park, Oak Brook, Naperville, and parts of the Schaumburg area benefit the most from this trend. Homeownership challenges are also aiding demand for apartments. Largely the result of sustained high interest rates, the spread between Chicago’s average effective Class A rent and the mortgage payment on a median-priced home has neared its highest point in more than a decade. Amid these dynamics, Chicago’s multifamily sector is well equipped to weather a slower level of economic growth this year. Improving absorption will keep vacancy below its local long-term average of 5.7 percent, aiding a rent growth rate that will rank third among major markets nationally in 2024.