Chicago falls on Zillow's 2025 hottest markets list
Add Axios as your preferred source to
see more of our stories on Google.
Chicago has fallen significantly on Zillow's latest hottest housing markets list.
Why it matters: Zillow's annual ranking forecasts the most competitive housing markets for buyers. Markets at the top of the list are largely "starved for housing inventory," the real estate platform shares with Axios.
- These regions tend to be relatively affordable with strong job and wage growth.
The big picture: Metro Chicago dropped 17 positions, from 22nd in 2024 to 39th in 2025.
How it works: Zillow analyzes forecasted home value growth, recent housing market velocity and projected changes in the labor market, home construction activity and number of homeowner households.
- Home value growth means how much prices in the area are going up and velocity refers to how quickly homes are selling.
- So for metro Chicago, prices from last year to 2025 are falling, while homes are sitting on the market longer.
Between the lines: Real estate broker Sammy Lubeck tells Axios that new construction in northern suburbs like Glenview, Northbrook and Burr Ridge has "definitely helped raise the median price."
- This is happening in the high-priced North Shore, too. "Kenilworth always sells for a premium price [but] Glencoe, you had nine properties in that three month period [July-Sept.] above $3 million sell. So I think you're seeing a lot more newer construction there in Glencoe, along with gut rehabs, which has definitely elevated the prices."
Zoom out: The hottest metro in the Midwest is Indianapolis, ranked No. 2 overall.
- Indianapolis is relatively affordable when compared to nearby Chicago metro. Strong employment and income growth has helped to support housing demand. That demand, combined with a lack of housing inventory, has kept competition for homes elevated.
Reality check: The days of 3% interest rates are gone — at least for the near future. So waiting to buy when interest rates drop is a waste of time, Lubeck says.
- "I do see a lot of people just wasting time and saying, 'Oh, we'll buy a house when the rates come down,' and they've missed out on so many great properties."
The bottom line: Affordability and inventory are the name of the game. If buyers really love a property, they should talk to a lender to understand what they can afford — and act quickly.