Chicago rents are still high, for now
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Rent is still getting pricier in Chicago, but renters are faring better here than in much of the U.S.
Driving the news: In the fourth quarter of 2022, the average asking rent in Chicago was $1,830, up 8.2% from a year earlier, per economic research firm Moody's Analytics.
- Still, that percentage is lower than the national average.
Why it matters: Affordability concerns are starting to weigh down the booming rental market, Axios' Sami Sparber writes.
What's happening: Many would-be homebuyers chose to rent longer last year, sustaining apartment demand, economists at Moody's Analytics say. But folks are hitting their spending limit.
- For the first time in over two decades, households now have to spend 30% of their income on average rents, a new report shares.
What they're saying: Year-over-year rent growth slowed across the board in the second half, "and we expect further deceleration as new supply makes it to market at the same time the labor market softens," senior economist Lu Chen tells Axios.
- Experts recently predicted that Chicago rents could start normalizing this year to increases of 2% to 4%, Crain's reported.
Zoom out: Rents are already falling in cities near the epicenter of the pandemic home-price boom, Axios' Matt Phillips reports, citing Realtor.com data.
What we're watching: New apartment construction. The expected surge in supply could help reduce prices.
- Downtown Chicago could see 2,900 new apartments completed this year and 5,600 in 2024, real estate valuation specialist Integra forecasts, per Crain's. That would be the most added downtown annually since at least 1999, according to Integra data.
Yes, but: Many haven't broken ground yet and could face delays due to financing or permitting issues, experts tell Crain's.
The bottom line: Most cities will "remain undersupplied with the kind of affordable units that see the highest demand," per the Wall Street Journal.