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2021 Year-End Report: Outdoor-Friendly Small Metros Were the Most Desirable for Rent, Led by Eugene, OR

In 2021, the most competitive rental markets were small metros, within close proximity of nature that allow for an affordable lifestyle. So, with their high demand, low apartment availability and renters with high credit scores, the top three most coveted locations to rent in this year were Eugene, OR; San Diego, CA; and Knoxville, TN.

As the pandemic lingers on, its effect on where and how people choose to live intensifies. Following last year’s trend — and despite the fast pace of recovery in the nation’s big cities — prospective renters continued to look for larger apartments close to nature this rental season. As such, locations that were able to accommodate the need for ample living spaces and easy access to outdoor attractions — but that also had a limited supply of rentals — turned red hot this year.

Even with the vaccine rollout, office attendance remains limited and many employees continue to work from home all or most of the time. So, with home at the center of our universe now more than ever, we decided to find out which locations were the most attractive for renters and, hence, the most competitive in 2021.

What we found was that small metro areas — such as Eugene, OR, and Knoxville, TN — were magnets for new residents (even out-of-state newcomers) relocating from very densely populated metros. And, the common thread among these areas was a combination of affordable lifestyle, more elbow room and proximity to the great outdoors.

To rank the hottest rental markets in 2021, we looked at the 105 largest markets in the U.S. where data was available for the most revealing metrics in terms of competitivity, including:

  • the number of days rentals were vacant
  • the percentage of apartments that were occupied
  • the number of renters competing for vacant apartments
  • rental applicants’ average credit scores

More renters competing for fewer apartments amid surging credit scores

On a national level, apartments that became vacant were filled within 28 days on average this rental season. During the same time period, 95.4% of total rentals were occupied, with an average of 14 prospective renters competing for a vacant apartment.

Meanwhile, the average credit score of rental applicants in the U.S. was 640 for the year, slightly up compared to 2020’s credit score of 638. In fact, more than 30% of renters in the nation’s top 50 hottest rental markets in our ranking had average credit scores significantly higher than the national average — which is indicative of renters’ financial strength this year. In other words, more renters with better credit scores were competing for apartments in 2021. And, by and large, the most in-demand U.S. rental markets appealed primarily to Millennials, as Gen Zers are still in the process of building credit history.

The nation’s hottest rental market in 2021 was Eugene, OR, the poster child for the majestic beauty of the Pacific Northwest. This metro, which includes Bend, boasts a different kind of cool compared to its hip sibling, Portland, which ranked much lower on our list. With the exception of a dip at the onset of the pandemic, Eugene has been consistently attracting new residents in search of a relaxed lifestyle, continental climate and near-immediate access to breathtaking natural locations. What’s more, Eugene is often labeled Silicon Shire to reflect its rapidly growing tech scene.

According to Yardi Matrix data, the total number of apartments here increased by only five percentage points in the past two years —or 2,380 apartments. Consequently, no less than 30 prospective renters competed for a vacant apartment, and it took just 24 days on average for a unit to be occupied during the 2021 rental season. Additionally, people who applied for apartments in Eugene had an average credit score of 670, 30 points above the national average.

San Diego came in second this rental season. Despite the rising cost of living and housing, high taxes and the risk of natural disasters, San Diego is still a preferred alternative to other expensive West Coast metros — especially now that hybrid work is on the rise. Plus, as a typically strong job hub, San Diego is already on track to recovery thanks to funding coming in through local and federal emergency programs.

However, similar to other Southern California cities, there weren't enough apartments built here in the last two years to accommodate the growing demand in the metro: This year, it took 26 days for an apartment to be filled, with 29 people competing for a rental in America’s Finest City, twice as many as the national benchmark. And, this rental season, the typical San Diego apartment seeker boasted an average credit score of 671, the highest among the top 10 rental markets.

Apartments get snatched in less than 20 days in Knoxville, TN

Knoxville, TN, a smaller and more affordable market, comes in third in our ranking for the year. People who applied for apartments here this rental season had an average score of 645. Because very few apartments have been built in Knoxville since 2020, competition was fierce, but housing remained significantly more affordable than larger markets.

Notably, renters’ interest in Tennessee has been spiraling up since the onset of the pandemic, thanks to the state’s overall affordable cost of living, absence of income tax and scenic Great Smoky Mountains. Plus, Tennessee ranked No. 1 in U-Haul’s 2020 migration trends report for the first time, with Knoxville listed as one of the top cities for growth.

In fact, demand for apartments in Knoxville was so high that a whopping 36 people competed for a vacant rental during 2021 — three times more than the national average. As a result, it only took 18 days on average for an apartment to be occupied — roughly a week less than in Eugene and San Diego. Apart from in-state transplants, a sizable number of residents were moving to Knoxville from pricier metros across the country, particularly Los Angeles, Chicago, New York City and the Bay Area.

And, contrary to popular belief that California has seen a veritable pandemic-induced “exodus,” recent research revealed that residents haven’t really been fleeing the Golden State. Instead, they moved within the state, seeking better quality of life and less expensive housing.

To that end, our top 50 rental markets this year featured eight California locations, with four included on the red-hot list.

One of the top California destinations was Central Coast. Despite a limited supply of rentals, the metro continued to attract affluent Millennials in their 30s (mostly coming from Silicon Valley) who still haven’t taken the plunge into homeownership.

Orange County is more competitive than Los Angeles

Infamously pricey Los Angeles was surpassed this year by Orange County, which ranked ninth in our top 10 hottest rental locations. The metro had an occupancy rate of 97%, significantly higher than the national average. And, like many other metros in Southern California, Orange County has seen increased demand amid limited apartment supply throughout the last few years.

Likewise, Orange County prospective renters had a solid average credit score of 671 this rental season, well above the national benchmark. Even so, people searching for apartments in the O.C. were looking to get more bang for the buck: A growing economy and better job opportunities; a great food scene; endless entertainment; and some of the best surf spots in the world — all close to both Los Angeles and San Diego.

On that same note, the primarily industrial Inland Empire has seen demand for rental apartments skyrocketing this year. The metro ranked slightly below Los Angeles on our list, at #14. Coupled with an average credit score of 636, the low-supply Inland Empire was a top contender for the City of Angels. Moreover, the housing market here was so intense in 2021 that the same number of prospects (28) competed for a rental in the Inland Empire, but it took just 25 days for an apartment to be occupied, compared to 30 days in Los Angeles.

Big-city renters favor small markets in the Northeast

It's worth noting that nine of the nation’s top 50 most competitive metros were in the Northeast — a sign that the pandemic has put a premium on spaces in this part of the country, as well. As a matter of fact, demand here was so high that, in some cases, prospects were willing to offer months of advance payments to secure an apartment. What's more, most Northeastern metros in our top 50 list had occupancy rates above the national average of 95.4%, including Providence, RI (97.4%); Long Island, N.Y. (96.7%); and Central New Jersey (96.5%).

Boasting an occupancy rate of 97.5%, apartments in Lehigh Valley, PA, were also quite sought-after this rental season. Here, as many as 34 people competed for an apartment and it took 24 days on average for a vacant rental to be filled. In other words, as the economy improves, more prospective renters — particularly Millennials coming out of lockdowns spent in crammed spaces in New York City and New Jersey — are choosing the laid-back, nature-rich Lehigh Valley in which to live and call home.

Vacant apartments filled at warp speed in charming Fayetteville, a family-friendly city in North Carolina. It only took 15 days for a unit to be occupied here — the fastest in the U.S. and almost half as long as the national average. The market’s occupancy rate of 97.9% was also the highest in the nation this year.

Methodology

RentCafe.com is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the U.S. 

Rental application data was sourced from RentGrow, Inc. and was received wholly anonymized and aggregated. No personally identifiable or other confidential renter information was disclosed or used in conjunction with this article.

To compile this report, RentCafe’s research team analyzed Yardi Systems apartment data across 105 rental markets in the U.S. The data comes directly from competitively-rented (market-rate) large-scale multifamily properties (50+ units in size), excluding fully affordable properties. 

Markets were ranked based on a market competitive score. To calculate each market’s score, we ranked them according to four metrics and their averages for April through September 2021: apartment occupancy rate, prospective renters per vacant unit, average total days vacant (data from Yardi) and the average credit score of rental applicants in 2021 (data from RentGrow). We then compiled an average ranking by assigning a 40% weight to the credit score and 20% to each of the other three metrics (apartment occupancy rate, prospective renters per vacant unit and average total days vacant).

In this study, "market" and "metro" are interchangeable and bear the same parameters as the Yardi Matrix markets.

Fair use and redistribution

We encourage you and freely grant you permission to reuse, host, or repost the images in this article. When doing so, we only ask that you kindly attribute the authors by linking to RentCafe.com or this page, so that your readers can learn more about this project, the research behind it and its methodology. For more in-depth, customized data, please contact us at media@rentcafe.com.

Veronica Grecu
Veronica Grecu
Veronica Grecu is a senior creative writer and researcher for RentCafe. With more than ten years of experience in the real estate industry, she covers a variety of topics in the residential and commercial real estate, including trends and industry news. Previously, she was involved in producing content for Multi-Housing News, Commercial Property Executive and Yardi Matrix. Veronica’s academic background includes a B.A. in Applied Modern Languages and an M.A. in Advertising and PR.

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