The Midwest has emerged as the most competitive region for apartment hunters this year, many of whom are exploring new housing options as high home prices and overall living costs remain challenging. Half of the top 20 rental metros and six of the best small rental markets are located in the Midwest, with the suburbs of Chicago challenging Miami’s position as the country's most competitive rental region, according to RentCafe’s latest analysis.
The marketplace determines the most competitive regions by analyzing metrics such as days of apartment vacancy, occupancy percentage, number of prospective renters and share of new units recently completed. Overall, RentCafe found that the country is experiencing a very competitive rental market for tenants this year.
Although the number of available apartments has increased by 0.75% compared with 0.67% growth last year, there are still not enough units to meet demand, the company said. Limited supply has driven lease renewal rates to 63.1% from 61.5% last year. National occupancy remains high at 93.3%, and the average time to rent a vacant building is 43 days.
Although Miami continues to lead the top 10 rental markets, suburban Chicago is a close second, and the entire windy city ranks 18th on the list, highlighting the strength of the Midwest region for renters who are attracted to more affordable areas, larger space and convenience. Florida, which has experienced a notably softening rental market during the past year, ranked second and the Northeast follows closely in third.
Miami’s place atop the list is secured by the growth of major banking institutions and investment firms in the city, while existing industries like tech and healthcare continue to grow and attract more workers. The metro also benefits from a lack of income tax. Vacant apartments take about 36 days to find a tenant in Miami and have 14 renters competing for each available unit, which is double the national average.
Suburban Chicago draws renters thanks to its affordability, strong job market, access to public transit and the rise of thriving suburban downtowns, said RentCafe. Some suburbs have insufficient available housing, making apartment hunting a challenge in Oak Brook, Arlington Heights, Barrington and the likes. Occupancy in the area is 95.4% and apartments fill within 39 days on average. About 10 applicants compete for each unit in the suburbs of Chicago.
The third-most competitive rental market in the United States is North Jersey, which attracts professionals wishing to stay close to jobs in Manhattan and Philadelphia. Millennials and Gen Z are drawn to smaller, more efficient living spaces in the likes of Jersey City, Newark and Hoboken. More than 71% of renters renewed their leases in the market, which has pushed occupancy to 95.2%. It now taks 41 days for vacant units to rent, with nine applicants per unit.
The study identified California's Inland Empire as the fastest-rising rental market, with a 4.1% increase in lease renewals amid modest supply growth. Many renters in the Inland Empire are relocating from coastal cities, said the report. It takes about 47 days to rent an apartment in the area, with 12 applicants per unit.