Real estate in Chicago in 2026: Economic trends and agent strategies for the upcoming year

Expert projections for Chicago real estate in 2026 suggest a return to normalcy after a transformative year in 2025. At the Chicago Association of REALTORS® 2026 Market Outlook event, CAR President Lutalo McGee stressed the importance of being informed, highlighting the need to understand data, interpret its implications, and communicate clearly with clients.

In a dynamic environment shaped by technological advancements and consumer expectations, McGee emphasized that despite evolving tools and platforms, real estate remains a people-centered business built on trust, relationships, and expertise.

Lawrence Yun, chief economist at the National Association of REALTORS®, presented an economic outlook focusing on mortgage rates, inflation, and the housing market. Yun predicts a decrease in mortgage rates in 2026, making the market more appealing to potential buyers. He noted the Federal Reserve’s efforts to ease economic stress through rate cuts but cautioned about potential inflation concerns.

Yun highlighted the importance of job market trends and their impact on the housing market. Despite strong employment figures and record numbers of individuals receiving steady pay, the creation of new jobs has slowed, influencing the overall market conditions. In Illinois and the Chicago metro area, high employment rates have not directly translated to increased home sales, with factors like high mortgage rates and low inventory affecting the market.

Looking ahead, Yun anticipates that falling mortgage rates and increased inventory will drive stronger sales in 2026. While national home sales remained stable in 2025, Chicago saw modest gains, prompting a projected 14% increase in sales for the upcoming year.

Thomas Walstrum, a principal business economist at the Federal Reserve Bank of Chicago, shared his outlook at another market event, indicating expected growth in U.S. real GDP and modest increases in unemployment and inflation rates. Analyzing the local impact, Walstrum highlighted that Chicago’s employment growth closely aligns with national trends, albeit at a slightly slower pace due to regional industry characteristics.

In the real estate sector, Walstrum observed relative stability in Chicago home prices compared to other major cities, contributing to increased affordability. However, new home sales have seen a slowdown influenced by factors like higher interest rates and market dynamics following the pandemic.

At CAR’s 2026 Market Outlook, keynote speaker Marki Lemons Ryhal encouraged agents to maximize their access to data resources and leverage them to create engaging content like videos and infographics. She emphasized the importance of exploring commercial trade data to gain insights into key demographic and economic indicators that can inform strategic decisions.

Overall, experts predict a promising outlook for Chicago real estate in 2026, with decreasing mortgage rates, increased inventory, and strategic data utilization playing key roles in driving market growth and stability.