Chicago Housing Market Sees A Surprising Shift In Buyer Behavior

Homebuyers in Chicago are walking away from home purchase agreements as the U.S. housing market struggles with rising mortgage rates, high home prices and weakening demand, according to a new report from real estate brokerage Redfin.

In the Chicago metro area, 14.1 percent of homebuying contracts were canceled in September, compared with 14.5 percent nationally, according to Redfin's housing market report released Monday.

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Nationwide, canceled deals are part of a broader housing slowdown. Pending home sales fell about 4 percent from August to September, and the number of houses on the market is higher than at any point since the pandemic.

The high housing inventory gives buyers an advantage, but with mortgage rates that have inched to 2.3 percent, the highest level in three years, "fewer people buy because fewer people can afford them," Chen Zhao, Redfin's head of economic research, said in the report.

Chicago At A Glance

In the Chicago metro area, pending home sales fell 5.8 percent in September compared with a year earlier, according to Redfin.

Nationally, annual home price growth slowed to just 1.3 percent, and about three in five homes sold for less than their original asking price. Nearly one in five sellers with active listings cut their asking prices, with price reductions becoming more common in 43 of the 50 largest metropolitan areas.

The median home sale price in Chicago was $381,125, an increase/decrease of 5.9 percent from September 2025.

The number of homes available for sale rose 0.6 percent from a year earlier, while closed home sales decreased 2.3 percent.

That's a two-sided coin, according to Zhao.

"For buyers, less competition means more room to negotiate: on price, on closing costs, on repairs, and sometimes sellers even pay for a mortgage-rate buydown," she said. "Slow sales also mean prices may flatten or fall in the not-so-distant future."

Sellers should keep in mind that while many house hunters have pulled back, there are people who need to move and are still buying homes, Zhao said.

"My best advice for sellers in this environment is to price realistically from the start and lean into any flexibility you can offer; a rate buydown or covering closing costs can go a long way when buyers are stretched thin," she said.

Where Buyers Back Out Most

Nearly one in five homebuying agreements in Jacksonville, Florida, fell through in September, the highest cancellation rate among the 50 largest metro areas.

Jacksonville's 19.9 percent cancellation rate was followed by Tampa, Florida, at 18.8 percent; Las Vegas at 18.6 percent; San Antonio, Texas, at 18.5 percent; and Phoenix at 18.4 percent.

At the other end of the spectrum, San Francisco had the lowest cancellation rate, at 2.8 percent. Nassau County, New York; San Jose, California; Montgomery County, Pennsylvania; and New York City also had cancellation rates below 8 percent.

The differences reflect how much bargaining power buyers have in individual markets. In places where homes remain in high demand and listings are relatively scarce, buyers have less room to reconsider a purchase, Redfin said.