If you thought only Chicago’s summers sizzled, think again—the city’s real estate market just matched the temperature, sending home sales tumbling to their lowest August in over a decade. What’s the culprit? Steeply climbing home prices that keep sellers happy but leave buyers sweating more than a CTA commuter in July.
Chicago’s Home Prices: Not Just Hot—Scorching
In 2025, Chicago managed to outpace almost every major U.S. city—and the country as a whole—in home price growth. Month after month, prices ignored calls to cool off and instead, shot upward at a rate worth a second glance. According to Illinois Realtors data released on September 23, the median price of a Chicago home sold in August reached $378,000. That’s up 5.9% from the same month last year. Meanwhile, in the nine-county metro area, the median hit $375,000, marking a 5.6% increase.
To put this in perspective, nationwide, the median price of homes sold in August was $422,600—a 2% rise. The national rate may be positive, but it’s only about a third as large as Chicago’s jump. That’s not a fluke. Throughout 2025, while most of the nation’s markets eased up, Chicago’s home price growth shifted into overdrive. In May, prices in the Windy City were rising at four times the national rate.
The Case-Shiller Index: Chicago Stands Out
The S&P Cotality Case-Shiller Index, a gold standard for tracking home values, shows the same story. In July (the most recent available data), home values in the Chicago area were up 6.23% from a year before. Nationwide, values grew by just 1.68% in that period. Chicago’s numbers didn’t just beat the nation; they kept gaining steam—up from 6.09% in June. Most American cities, on the other hand, hit the brakes. Of the top 20 metro areas tracked by the index, 15 saw price growth cool down in July compared to June.
- In January, nationwide home prices were up 4.1% year-over-year. By July? Just 1.68%.
- Chicago’s price growth slipped too, from 7.5% in January to 6.23% in July. But the drop (1.3 percentage points) is far smaller than the national cooldown (2.4 percentage points).
- For every month in 2025, Chicago’s price growth has stayed north of 6%.
So, while the rest of the country “downshifted to a much lower gear,” as Nicholas Godec of S&P Dow Jones Indices puts it, Chicago’s market kept revving the engine.
Sales Slip to 2011 Levels: Is Affordability the Missing Piece?
If strong home prices leave homeowners smiling, buyers are starting to feel the pinch—especially with tight inventory and stubborn mortgage rates. Fewer homes changed hands in August in both Chicago proper and the wider metro area than in any August since 2011, back when the market was still crawling out of the mess left by the 2008 crash.
- Only 1,920 homes sold in Chicago in August, down 9.5% versus August 2024. This marked the first August since 2011 that sales dipped below 2,000.
- Historically, August sales in the city topped 2,500 during the more robust years of the late 2010s and early 2020s.
- The larger metro area saw 8,395 homes sold—a 4.3% drop year-over-year and the lowest August tally since 2011. Normal Augusts in recent years saw counts above 10,000.
What’s behind this sudden chill? The answer boils down to prices. Existing homeowners look at today’s elevated prices—and those persistent mortgage rates—and decide it’s just too expensive to trade up. So, they stay put, reducing the flow of new listings. That means inventory shrinks, sending buyers scrambling over what’s left and pushing prices even higher. And for would-be buyers, the high cost is enough to keep many on the sidelines for now.
Looking Ahead: Opportunity or Obstacle?
This year in Chicago, “hot” describes more than just the weather. With home values surging, sellers and current homeowners can celebrate their housing wealth, while new buyers find themselves priced out or forced to compete for a shrinking pool of homes. As long as the city keeps breaking from the national script, the market here is unlikely to cool off any time soon. Buyers, keep your sunscreen—and your savings—handy. Sellers, enjoy the warmth while it lasts.
