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Monthly multifamily market intelligence

The Pierson Report

Monthly multifamily market intelligence for local, state, national, and global context. Published by NVest Analytics. Every figure is sourced and dated.
September 2026
Chicago MSA. Multifamily
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The Month in Three Parts

How We Got Here

  • Chicago never had a supply wave: inventory growth is 0.6% and deliveries fell to a decade low, which kept occupancy above its 10-year average through the national downturn [133][134].
  • Nationally, construction fell to 475,000 units, 3.5% of inventory and the lowest since 2013 [27][28].
  • Agency 5-year quotes ran 5.14 to 5.29% in March [40] before the 10-year Treasury climbed from 4.19% on Jan 2 to 4.78% on Sep 4 [1].
  • The Fed committee held rates at 3.50 to 3.75% on Jul 29, but three members voted to raise them [17][18].
  • Chicago ranked fifth nationally in 2025 transactions: $3.7 billion across 89 properties at $226,409 per unit [121].

Where We Are Now

  • Chicago is one of the three best major markets for rent growth: effective rents up 3.2 to 3.3% year over year, behind only New York and San Francisco among the top 30 [133][135].
  • Occupancy 94.9%, above the 10-year average of 93.8%; 24 of 26 submarkets at 93% or better [133].
  • Supply is tiny: 9,935 units under construction, 2,904 delivered in the first half (up 15% from a very low base), more than half in the suburbs [133].
  • Inflation is still above target: CPI 3.4% in July, PCE 3.7% in July [36][216]. SOFR is 3.66% [35].
  • Pricing: cap rates have normalized near 6% [136], the highest of the markets we cover, so Chicago sits within about 7 basis points of neutral leverage against 6.07% agency debt [40].
  • Population has stabilized: the metro grew a third straight year to about 9.4 million, and the city added 5,000 residents in 2025 [137].

Where We're Headed

  • Rates: futures markets price about a 58% chance of a quarter-point increase on Sep 16, after peaking near 66% following the Jackson Hole speech [217]. If it lands, agency 5-year fixed rates extrapolate to roughly 6.2 to 6.3% [1][40].
  • Supply: with 9,935 units underway and inventory growth of 0.6%, Chicago has the least new competition of any top-10 market [133].
  • Illinois employment growth is slow, about 0.5% a year, with unemployment near 4.9% [138]; Chicago rents are growing anyway because supply is scarce.
  • Cook County reassesses the south and west suburbs in 2026; multifamily notices are landing now [139]. Property tax is the largest Chicago operating risk.
  • Net: Chicago is the yield play of the top 10. Near-6% cap rates, 3% rent growth and almost no supply, traded against a slow economy and the highest effective property taxes among the metros we cover.

What It Means for Chicago

  1. The rate direction has flipped. Three Fed votes to raise rates and a 10-year Treasury at 4.78% mean the "wait for cuts" plan is over for 2026. Owners with loans maturing in 2026 or 2027 should model a refinance at 6.0 to 6.5% [1][17][18].
  2. The yield market. Cap rates near 6% [136] make Chicago the only top-10 metro where agency debt at 6.07% is close to neutral leverage, a gap of roughly 7 basis points [40].
  3. Rent growth without supply. 3.2 to 3.3% year over year, third among major markets, on 0.6% inventory growth [133][135].
  4. Deal flow is real. $3.7 billion in 2025, fifth nationally [121]; a 42-story Loop tower traded for $126 million and a Lincoln Park building for $20.4 million this summer [140][141].
  5. Taxes are the risk. The 2026 Cook County reassessment of the south and west suburbs is underway [139]; Illinois has the second-highest effective property tax rate in the country.

Chicago Multifamily

Chicago is the supply-starved market of the top 10. Inventory growth is 0.6%, fewer than 10,000 units are under construction, and occupancy of 94.9% sits above its 10-year average. Rents are growing 3.2 to 3.3% a year, third among major U.S. markets, while cap rates near 6% make it the highest-yielding metro we cover.

Average cap rate
~6%
Normalized; highest of the markets we cover
JPMorgan Chase outlook [136]
Rent growth
+3.2% YoY
Effective; Yardi 3.3%
Cushman and Wakefield / Yardi [133][135]
Occupancy
94.9%
Above 10-year average of 93.8%
Cushman and Wakefield Q2 2026 [133]
Population
9.4M
Metro up a third straight year; city +5,000 in 2025
Census via Fox 32 / MacroTrends [137]

Chicago Cap Rate Range by Asset Class

Where deals are clearing. Hover each range.
4%5%6%7% Class A 5 to 5.6% Class B 5.7 to 6.3% Class C 6.5 to 7.5% avg 6.0% debt 6.07%
Cap rate rangeMarket averageAgency loan rate
Sources: JPMorgan Chase [136]; Bisnow [140]; Commercial Real Estate Direct [141]. Class splits are interpolated around the published average.

Chicago vs. National Fundamentals

Hover a bar. Negative means rents are falling.
Rent growth, year over year 0%-2%-4%+2% Chicago +3.2 to 3.3% U.S. -0.8% Vacancy 0%5%10%15% Chicago 5.1% U.S. 4.3 to 8.9%
ChicagoUnited States
Sources: Cushman and Wakefield [133]; Yardi Matrix [135]; Apartment List [25]; CBRE [26].

Supply Pipeline, U.S. and Chicago

The delivery wave is ending.
MetricNationalChicagoRead-through
Deliveries382,000 projected for 2026 [28]2,904 units in H1 2026, up 15% YoY; year-to-date at a decade low in 2025 [133][134]53% of deliveries suburban: Will, Northwest Cook, DuPage [133]
Under construction475,000 units, 3.5% of inventory [27]9,935 units; 52.8% suburban [133]Inventory growth 0.6%
Absorption vs. deliveries362K vs 358K, four quarters [27]Occupancy 94.9% with 24 of 26 submarkets at 93%+ [133]Demand comfortably ahead of a tiny pipeline
2026 outlookPeak then tighten [29]Rent growth among the top three major markets [135]Adaptive-reuse conversions add downtown supply [142]
Supply pressure by submarketSuburban Will, Northwest Cook and DuPage counties lead deliveries [133]Downtown towers trading; Loop conversions underway
Price trend$226,409 per unit in 2025 sales [121]Dealmaking above 2024 levels [143]

Chicago Submarket Snapshot

The largest cities in the Chicago-Naperville-Elgin, IL-IN-WI metro. Rent and rent growth from Apartment List (Aug 2026); multifamily units permitted (buildings of 5+ units) from the Census Building Permits Survey. Permits lead construction by 12 to 24 months. Rows alphabetical; hover a row for detail.
SubmarketMedian rent
Apartment List, Aug 2026 [207]		Rent, year over year
Apartment List [207]		MF units permitted, 2025
Census BPS [208]		MF units permitted, 2026 through Jul
Census BPS [208]		2026 permit pace vs. 2025
annualized
Arlington Heights$1,953+1.2%250-100%
Chicago$1,898+4.5%2,899737-56%
Downers Grove$1,903+4.0%130-100%
Naperville$2,120+1.0%026n/a, no 2025 permits
Schaumburg$2,029+0.0%011n/a, no 2025 permits
Wheeling$2,033-1.2%00n/a, no 2025 permits

Chicago Transactions and Deal Flow

Chicago deal flow was steady and broad through the last 30 days, from a 220-unit value-add community in the western suburbs to small North Side buildings trading at record neighborhood prices [232].

PropertySubmarketUnitsBuyer / SellerPrice / CapReported
Fox Run ApartmentsSt. Charles, western suburbs220Eastham Capital and Bender Cos.; value-add, average rents $1,703UndisclosedSep 4, 2026 [232]
Springs at Oswego (renamed Trillium at Oswego)Oswego280JVM Realty; sold by Continental Properties (Cushman and Wakefield). 2019 buildUndisclosedAug 27, 2026 [232]
1515 N. Fremont St.Lincoln Park98Marcus and Millichap brokered; 2016 build with 4,000 square feet of commercial space$20.4MAug 24, 2026 [232]
6500 N. Claremont Ave.West Rogers Park32Claremont JV, led by Silver Property Group (Interra Realty); highest multifamily price recorded in the neighborhood$6MAug 18, 2026 [232]

Multifamily Capital Markets

Agency lending (Fannie Mae and Freddie Mac) remains the workhorse: a combined $176 billion cap for 2026, half of which must go to affordable housing. As of Aug 31 low-leverage agency loans price in the mid-5s and higher-leverage quotes sit just above 6% [40]. Across all multifamily products, quotes run 5.43% to 6.63% [220]. CBRE put the average multifamily loan spread at 162 basis points in Q2, 15 tighter than a year ago, with lenders competing on price rather than leverage [219]. Bank bridge money runs SOFR plus 225 to 325 basis points, debt funds SOFR plus 300 to 450.

Agency Multifamily Rates, 2026 Trend

Freddie Mac indicative 5-year fixed at 1.25x debt coverage and 65% loan-to-value, top of the published range. One source throughout. Hover the points.
6.4% 6.0% 5.6% 5.2% Jan 20 Mar 9 Aug 31 5.42% 5.29% 6.07%
Source: BWE Market Rates [40], one rate sheet at three dates (Jan 20, Mar 9 and Aug 31, 2026). Indicative levels only; Freddie Mac prices each loan individually and does not publish pricing.

Lending Landscape

Programs, caps, and terms relevant to Chicago owners.
ItemCurrentSource
Agency 2026 purchase cap$88B each, $176B totalFHFA [5]
Mission-driven minimum50%FHFA [5]
Freddie Mac 5-year fixed, higher leverage (1.25x / 65%)5.92-6.07%BWE, Aug 31 [40]
Fannie Mae 5 / 7 / 10-year, 65% LTV, 1.35x5.56-5.96% / 5.62-6.02% / 5.68-6.08%BWE, Aug 31 [40]
Freddie Mac 5 / 7 / 10-year, 60% LTV, 1.30x5.87-6.02% / 5.92-6.07% / 5.88-6.03%BWE, Aug 31 [40]
Max LTV / min DSCRAgency tiers run to 80% LTV at 1.25x; best pricing at 55 to 65% LTV and 1.35 to 1.55x. Loans actually closing averaged 63.3% LTV and 1.43x in Q2BWE, Aug 31 [40]; CBRE Q2 2026 [219]
Bridge floating, bank / balance sheetSOFR + 225 to 325 bp (about 5.9 to 6.9%)Crittenden [41]
Bridge floating, debt fundSOFR + 300 to 450 bp (about 6.6 to 8.1%)RRA Capital [42]
Multifamily rate range (all products)5.43% to 6.63%Northmarq, Aug 25 [220]
30-year home mortgage (context)6.71%Freddie Mac PMMS, week of Sep 3 [7]

Illinois

Illinois is a slow-growth economy: employment rose about 0.5% over the year to June 2025, below the Midwest and the nation, and unemployment is expected near 4.9%. Chicago's apartment market works anyway because almost nothing is being built. The 2026 Cook County reassessment of the south and west suburbs is the operating-cost story.

Illinois job growth
0.5%
Year to June 2025; about 28,000 jobs
IDES / CGFA [138]
Unemployment
4.9%
Expected year-end 2025; above Midwest 4.3%
CGFA [138]
Chicago metro population
9.4M
Grew a third straight year
Census via Sun-Times / MacroTrends [137]
Cook County 2026
Reassessment
South and west suburbs; notices mailing
Cook County Assessor [139]

Illinois Job Growth

Annual. Hover bars.
0%1%2% Illinois 2025 0.5% Midwest 2025 0.6% U.S. 2025 0.8% Texas 2026 fcst 2%
Sources: CGFA and IDES [138]; Dallas Fed [9].

State-Level Operating Factors

Costs and policy that hit Chicago net operating income directly.
FactorStatusRead-through
Property insuranceModerate catastrophe exposure; premiums rising with national trendNot the primary Chicago cost risk
Property tax2026 Cook County reassessment covers the south and west suburbs; multifamily valuation reports issued by township [139]Illinois carries the second-highest effective property tax rate in the U.S.; underwrite the reassessment
Population and migrationMetro about 9.4M, up for a third straight year; city +5,000 in 2025 [137]Stabilized after post-pandemic losses
Key sectorStatewide employment +0.5%, below region and nation [138]Rent growth is a supply story, not a jobs story
Peer metros (Q2 2026)Boston vacancy 4.9%, rents +1.1% [144]. Seattle vacancy 6.7% [122]. DFW rents -1.6 to -2.1% [22]Chicago and Boston are the low-supply, positive-rent markets of the group

National Rates and the Fed

The Fed held at 3.50 to 3.75% in July with an unusual three-member vote in favor of raising. Futures now put a quarter-point increase at the Sep 15 to 16 meeting at about 58%, after the Jackson Hole speech pushed the odds as high as 66%. The 10-year Treasury closed Sep 4 at 4.78%, its highest of the year, and August payrolls came in at 162,000 with unemployment steady at 4.1%.

10-Year Treasury
4.78%
Up from 4.19% on Jan 2; 4.73% on Aug 28
U.S. Treasury, Sep 4 [1]
Fed Funds Target
3.50 to 3.75%
Held Jul 29. Three votes to raise
Federal Reserve [17]
SOFR
3.66%
Sep 3. Up from 3.61% on Jun 3
NY Fed, Sep 3 [35]
Next Fed Meeting
Sep 15 to 16
Futures price about a 58% chance of an increase
Federal Reserve [17]; CME FedWatch via CNBC [217]
CPI / PCE
3.4% / 3.7%
Jul CPI 3.4% (core 2.5%). Jul PCE 3.7% (core 3.3%)
BLS, Aug 12 [36]; BEA, Aug 26 [216]

The Rate Stack: How a Chicago Loan Gets Priced

Stacked from the Fed's policy rate up to what a borrower actually pays. Hover each layer.
Fed Funds midpoint 3.625% +1.16% +1.29% spread 10-year Treasury 4.78% Agency 5-year 6.07% 0%
Policy rate (Treasury)Term premium (Treasury)Lender spreadAll-in loan rate
Sources: Federal Reserve [17]; U.S. Treasury, Sep 4 [1]; BWE rate sheet, Aug 31 [40]. Decomposition is illustrative; spreads vary by leverage, term, and borrower, and a 5-year agency loan is priced off the 5-year index, not the 10-year.

10-Year Treasury vs. 30-Year Mortgage Rate, 1980 to today

Why apartments rent: the mortgage rate sets the cost of buying a house, and the gap between it and the Treasury is the part of that cost the market has added since 2022. Monthly averages, percent. Lower panel: mortgage rate minus Treasury, in percentage points. Hover for any month.
10-Year Treasury
4.77%
Daily close, 2026-09-03
FRED DGS10 [191]
30-Year Mortgage
6.71%
Freddie Mac PMMS, week of 2026-09-03
FRED MORTGAGE30US [192]
Spread, latest month
1.93 pts
1980 to date average 1.84 pts
FRED, monthly averages [191][192]
0%4%8%12%16%024198019841988199219962000200420082012201620202024 Spread, percentage points
30-year fixed mortgage (Freddie Mac)10-year TreasurySpread
Sources: FRED series DGS10 [191] and MORTGAGE30US [192], monthly averages of daily and weekly data, refreshed each build (2026-09-04).

Global Backdrop

Global bond yields moved higher again as central banks turned from cutting to tightening. The European Central Bank raised its deposit rate to 2.25% in June, the Bank of Japan reached 1.00% for the first time since 1995, and the Japanese 10-year crossed 3% on Sep 2. Energy prices are elevated on Strait of Hormuz supply disruption, which adds to inflation.

10-Year Government Bond Yields

Where the U.S. sits vs. peers. Hover a bar for context.
0% 2% 4% 6% United States 4.78% United Kingdom 4.70% Germany 3.40% Japan 2.97%
Sources: U.S. Treasury, Sep 4 [1]; Bank of England, Sep 2 [209]; Deutsche Bundesbank, Sep 4 [210]; Japan Ministry of Finance, Sep 3 [211]. All four are the issuing authority's own published series.

Global Policy and Risk Snapshot

Central-bank posture and macro risks that feed into Chicago borrowing costs.
FactorStatusWhy Chicago cares
European Central BankDeposit facility 2.25%, raised from 2.00% effective Jun 17, 2026 [212]The first ECB increase of this cycle; keeps global yields anchored higher
Bank of EnglandBank Rate 3.75%, held Jul 30; next decision Sep 17 [209]Gilt yields still rising to 4.70%, an inflation worry [209]
Bank of JapanPolicy rate 1.00%, raised Jun 16 and held Jul 31 [213]. JGB 10-year 2.97%, above 3% on Sep 2 [211]Less Japanese demand for Treasuries, so higher U.S. yields
Oil and energyElevated Brent $96.02, WTI $91.48 on Sep 1; Hormuz flows 4.9 million barrels a day in Q2 [214]Minus for inflation and Fed posture; no local energy offset
U.S. dollarIndex 99.16 on Sep 4, down 0.5% over the month and up 1.4% year to date [38]A weaker dollar makes U.S. property cheaper for foreign buyers
Sources: European Central Bank [212]; Bank of England [209]; Bank of Japan [213]; Japan Ministry of Finance [211]; EIA [214]; Trading Economics [38].

Sources

Show the 47 sources cited in this edition
  1. U.S. Department of the Treasury: Daily Treasury Par Yield Curve Rates, 2026 (10-year constant maturity; 4.78% on Sep 4, 2026)
  2. FHFA: 2026 Multifamily Loan Purchase Caps
  3. Freddie Mac: Primary Mortgage Market Survey
  4. Federal Reserve Bank of Dallas: Texas employment forecast strengthens (Jul 17, 2026)
  5. Federal Reserve: FOMC Minutes, July 28 to 29, 2026
  6. CNBC: Divided Fed holds interest rates steady (Jul 29, 2026)
  7. CRE Daily: Dallas Multifamily Rents Slide in 2026
  8. Apartment List: National Rent Report
  9. CBRE: Q1 2026 U.S. Multifamily Figures
  10. Cushman and Wakefield: U.S. Multifamily MarketBeat
  11. Apartments.com: The Supply Slowdown: 2026 Multifamily Outlook
  12. NAHB: Multifamily Market Expected to Cool in 2026
  13. Federal Reserve Bank of New York: Secured Overnight Financing Rate (SOFR), 3.66% for Sep 3, 2026
  14. BLS: Consumer Price Index, July 2026; CNBC: CPI report July 2026
  15. Trading Economics: U.S. Dollar Index (DXY), 99.16 on Sep 4, 2026
  16. BWE: Market Rates, as of Aug 31, 2026 (Fannie Mae DUS and Freddie Mac conventional fixed-rate ranges by term, DSCR and LTV tier); earlier BWE sheets as of Jan 20, 2026 and Mar 9, 2026 via the Internet Archive
  17. The Crittenden Report: Bridge lenders are flocking to multifamily
  18. RRA Capital: The bridge lending market floodgates will open in 2026
  19. Multi-Housing News / Yardi Matrix: Top 10 Markets for Multifamily Transactions (2025 data; Mar 11, 2026)
  20. Kidder Mathews: Seattle Multifamily Market Report Q2 2026
  21. Cushman and Wakefield: Chicago Multifamily MarketBeat Q2 2026
  22. Northmarq: Year-to-date multifamily deliveries fall to decade low in Chicago
  23. Yardi Matrix: Chicago Multifamily Market Report, June 2026
  24. JPMorgan Chase: Chicago Multifamily Market Outlook
  25. Fox 32 Chicago (Census data): Chicago's population grew to 2.73M in 2025; MacroTrends: Chicago metro population
  26. Illinois CGFA: State of Illinois economic forecast; IDES: Illinois Employment Situation
  27. Cook County Assessor: Reassessments and valuation reports; 2026 assessment calendar
  28. Bisnow: 42-story Loop apartment tower trades for $126M
  29. Commercial Real Estate Direct: Chicago apartment property sells for $20.4M (Aug 21, 2026)
  30. Chicago Agent Magazine: Chicago multifamily sees higher rents, more adaptive reuse
  31. Northmarq: Chicago multifamily dealmaking climbs past 2024 levels
  32. Colliers: Greater Boston Multifamily Report Q2 2026; Boston Real Estate Times: Boston multifamily strengthens in Q2
  33. FRED (Federal Reserve Bank of St. Louis): DGS10, Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity (daily; source Federal Reserve H.15)
  34. FRED (Federal Reserve Bank of St. Louis): MORTGAGE30US, 30-Year Fixed Rate Mortgage Average (weekly; source Freddie Mac Primary Mortgage Market Survey)
  35. Apartment List Research: Data and rent estimates downloads (city-level rent estimates, rent growth year over year, and vacancy index; monthly)
  36. U.S. Census Bureau: Building Permits Survey, place-level monthly and annual files (units authorized in buildings with 5 or more units)
  37. Bank of England: Interactive Statistical Database, series IUDSNPY, 10-year nominal par gilt yield (4.70% on Sep 2, 2026); Bank Rate 3.75%, held Jul 30, 2026
  38. Deutsche Bundesbank: Daily yield of the current 10-year Federal bond (3.40% on Sep 4, 2026)
  39. Japan Ministry of Finance: Japanese Government Bonds, interest rate (10-year 2.97% on Sep 3, 2026; 3.01% on Sep 2)
  40. European Central Bank: Key ECB interest rates (deposit facility 2.25% effective Jun 17, 2026)
  41. Bank of Japan: Statement on Monetary Policy, Jul 31, 2026; Change in the Guideline for Money Market Operations, Jun 16, 2026 (policy rate 1.00%)
  42. U.S. Energy Information Administration: Brent and WTI spot prices (Brent $96.02, WTI $91.48 on Sep 1, 2026); Short-Term Energy Outlook, August 2026 (Strait of Hormuz flows 4.9 million b/d in 2Q26 against 21.6 million b/d in 4Q25; Brent forecast to average about $85/b in 3Q26)
  43. Bureau of Economic Analysis: Personal Income and Outlays, July 2026 (Aug 26, 2026) (PCE 3.7%, core 3.3%)
  44. CNBC: Markets see Warsh endorsing a rate hike in September (Aug 31, 2026); Strong jobs report reignites rate hike fears (Sep 3, 2026), both citing CME FedWatch fed funds futures probabilities
  45. CBRE: Commercial Real Estate Lending Fundamentals Remain Strong in Q2 2026 (Aug 3, 2026) (multifamily loan spread 162 bp, LTV 63.3%, DSCR 1.43x, debt yield 10.2%)
  46. Northmarq: Commercial mortgage rates and spreads, as of Aug 25, 2026 (agency, FHA, life company and CMBS multifamily quotes)
  47. REBusinessOnline: Eastham Capital, Bender Cos. Acquire 220-Unit Fox Run Apartments in St. Charles, Illinois (Sep 4, 2026); JVM Realty Acquires 280-Unit Springs at Oswego, Illinois (Aug 19 and Aug 27, 2026); Marcus & Millichap Brokers $20.4M Sale of 98-Unit Lincoln Park Property in Chicago (Aug 24, 2026); Interra Realty Brokers $6M Sale of 32-Unit West Rogers Park Building (Aug 18, 2026)
Disclosures. Compiled Sep 4, 2026 from publicly available sources; figures are as reported by each source on the date shown and have not been independently verified. Where sources conflict, the range is shown. Items marked "Data unavailable" were not published or not captured in the period. Not investment advice.
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