Multifamily fundamentals continue to improve across the Midwest

Multifamily operating conditions have improved in the Midwest overall, though performance at the market level has varied. All major markets in the region posted rent growth over the past 12 months, with Minneapolis leading the pack at 3.5%, while Chicago and Kansas City recorded year-over-year increases of 2.7% and 2.6%, respectively. Shifts in vacancy were less favorable, with the vacancy rate in half of these markets rising over the past year. The largest driver of the region-wide vacancy improvement was Minneapolis-St. Paul, where the vacancy rate declined by 60 basis points from one year ago. Excluding the Twin Cities, the regional vacancy rate increased by 20 basis points during this period. Multifamily deliveries are down 14% compared to 2024. Approximately 31,000 units are on pace to be completed in 2025, a 20% decline from last year.

The third quarter has been the strongest quarter of 2025 for multifamily sales activity in the Midwest, with over 40% of year-to-date transactions taking place during this period. Minneapolis-St. Paul continued to account for the largest share of sales, representing 35% of all transactions, while Chicago and Kansas City made up 25% and 22%, respectively. Pricing picked up alongside the increase in activity. Year to date, the median sale price in the Midwest is $186,400 per unit, up 33% from 2024. Half of the markets in the region posted price gains exceeding 45% this year, with Cincinnati leading the way. The greatest annual decrease in pricing was recorded in Milwaukee, though this is due to the transaction mix; pricing here is still higher than in 2023. Cap rates have dipped slightly in 2025, averaging 5.7%, roughly 20 basis points lower than last year.

Download the full report to explore trends in the following Midwest markets:

• Chicago
   
• Cincinnati
   
• Indianapolis
   
• Kansas City
   
• Milwaukee
   
• Minneapolis-St. Paul
   
• Omaha
   
• St. Louis