Multifamily Rents Rise as Deliveries Slow in the Midwest

Multifamily properties throughout the Midwest continued to post mixed performance during the second quarter. Rents increased across all markets in the region, with the strongest gains recorded in Chicago and Kansas City. Vacancy shifts varied between markets, though most areas recorded moves of less than 50 basis points in either direction. The pace of deliveries in the Midwest has slowed this year, with first-half completions down 10% from the same period last year. The dip in newly added inventory is largely being driven by a steep decline in Chicago, where completions dropped by more than 60% compared to the first half of last year. In contrast, Kansas City, Milwaukee, and Omaha all posted annual delivery increases ranging between 50% to 80% during the first half of this year. Omaha is experiencing a surge in multifamily development, with record levels of new units set to come online in 2025.

Sales activity in the Midwest multifamily investment market picked up in recent quarters, as total sales year to date exceeded levels recorded in the same period of 2024 by 35%. Minneapolis-St. Paul made up the largest share of recent trades while Chicago and St. Louis trailed closely behind. As the pace of sales rose, so did pricing. So far this year, the median sale price in the Midwest is $159,100 per unit, up 13% from 2024. The region’s pricing increase was driven by strong gains in Indianapolis, Minneapolis-St. Paul, and St. Louis. Cap rates varied across the region, with rates in most markets going unchanged or inching higher, aside from Minneapolis-St. Paul. Cap rates in Minneapolis-St. Paul averaged 5.4% during the first half of the year, down from 6.3% in 2024. Cap rates in the Midwest averaged 5.6% to this point in the 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