Best Rental Markets in the U.S.: Competition for Apartments Intensifies in Midwest This Rental Season, but Miami Holds Onto 1st Place

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Miami was the most competitive rental market during this summer’s peak moving season, but the Midwest was America’s hottest apartment region, with three markets in the top five nationally. We see these cities make it to the list of the best rental markets in the U.S., largely because the Midwest offers housing options that fit more ranges of budgets, as well as a cost of living that’s lower than on the coasts. Naturally, this makes it a very attractive region to live in for renters seeking a balance between budget and quality of life.

How Competitive Was the U.S. Rental Market in High Season?

  • The national market was moderately competitive: 10 renters per vacant unit vs. 15 at the same time last year
  • Housing supply was up 0.57% vs. 0.67% one year ago; 60.5% of renters renewed their leases
  • Miami was the most competitive nationally: high occupancy rate of 97.1%; 25 renters per vacant unit
  • The Midwest was the hottest region: 3 markets in the top 5; Florida showed signs of cooling
  • Milwaukee was the second hottest market: 16 renters per vacant unit; apartments occupied within 1 month
  • New York was boosted by Brooklyn, Manhattan entering the top 20 (only 9 renters per vacant unit)
  • Central Jersey, Suburban Philadelphia topped lease renewal rates: more than 75% of renters renewed their leases

 

Several major companies have expanded or relocated to the Midwest in recent years — including Amazon, Walmart and Ford Motor Co. — which has given a big boost to the region’s economy, as well as rental competitiveness. As a result, more and more people from states with higher costs of living (such as California, Florida, Texas or North Carolina) are willing to trade sunshine for snowflakes in their pursuit of better housing and job opportunities.

Among the hottest markets in the Midwest, Milwaukee stood out with a remarkable jump from seventh to second place since the start of the rental season. In doing so, it even surpassed the notoriously competitive North Jersey, which fell to third place.

At the same time, New York metro and its surrounding areas continued to be magnets for renters in the Northeast, with Brooklyn and Manhattan in the top 15 this rental season.

Therefore, as the rental market got hotter in the summer months, we were curious to know what other choices apartment seekers had in peak rental season.

For this, RentCafe.com analyzed 139 markets in the U.S. where data was available, by using five relevant metrics to rank the nation’s hottest renting spots in peak season:

  • the number of days apartments stayed vacant
  • the percentage of apartments that were occupied by renters
  • how many renters applied for the same available apartment
  • the percentage of renters who renewed their leases
  • the share of new apartments opened recently

Then, to determine the rental market’s competitiveness, we calculated a Rental Competitivity Index (RCI). In peak rental season, the national score was 60, which means that the apartment market was moderately competitive during the year’s busiest time for renting.

More new apartments made it easier for renters to find a rental this summer compared to one year ago

Lingering economic clouds and the surge of new apartments hitting the market in the last couple of years have affected competitiveness in the rental market across the country.

More precisely, the completion of more apartments translated into a lower occupancy rate of 94% at the national level in peak rental season 2023, which was well below the 95.3% occupancy rate experienced at the height of last year’s busiest time for renting.

Renters have more options to choose from now, largely due to the lag effect of the pandemic building boom which is becoming more and more present in the market. Additionally, the national supply of apartments has increased by 0.57% compared to this time last year.

And, with more choices available, more renters have moved into new apartments this summer. Consequently, only 60.5% of apartment dwellers opted to renew their leases at the height of peak rental season this year. That’s below the share of lease renewals signed during the same period last year when 63.6% of renters chose to stay put.

Accordingly, it takes five days longer this year than it did last year for available apartments to be filled in (37 days vs. 32 days, respectively). Similarly, there are 33% fewer prospective renters competing for each available unit now compared to one year ago. Specifically, only 10 apartment seekers are vying for the same available unit this season compared to 15 prospective renters per vacant apartment last summer.

best rental markets in the u.s. 2023

It’s worth noting that more than half (or 54%) of the 139 U.S. markets analyzed have cooled in terms of competitivity across all five relevant metrics compared to this time last year. In particular, the most common signs of softening year-over-year are the uptick in the number of days that apartments stayed vacant and the decrease in the number of renters vying for one available unit.

Miami’s apartment market is still red-hot as Florida’s overall competitiveness dwindles

With its booming, diverse economy and relaxed lifestyle, Miami remains one of the best rental markets in the U.S., and America’s most competitive rental market during the busiest months for renting (RCI score 122), despite seeing a drop in its population for the first time in half a century. Although developers continue to build new apartments throughout the area, renters are having an extremely hard time finding a rental in Miami — on top of dealing with the rising costs of living and housing.

Here, newly built apartments represent 1.04% of Miami’s supply of housing, which is slightly more than the share of new deliveries that were available at the start of the rental season. However, the demand for apartments is so high in South Florida’s largest city that nearly three-quarters of apartment dwellers (73%) renewed their leases in peak rental season instead of moving into a new place, thereby keeping the occupancy rate at a high 97.1%.

Plus, there are more renters competing for a vacant unit (25 vs. 24 at the start of the moving frenzy), and apartments are occupied in about one month. That’s three days faster than the start of the rental season.

Yet, financial and economic shadows are looming over the Sunshine State and visibly affecting its competitiveness for renting — so much so that only three Florida markets made it into our top 20 this summer, as opposed to six locations at the start of the rental season and five markets one year ago: Besides Miami, Broward County (RCI score 98) secured the ninth position in our ranking, followed closely by Orlando in 10th place (RCI score 98).

Encompassing places like Fort Lauderdale, Plantation, Pembroke Pines, Hollywood, Coral Springs, Coconut Creek, Lauderhill and Pompano Beach, Broward County remains a popular renting spot for retirees as well as working professionals looking for career opportunities in technology, finance, and health care. This underscores the fact that Miami's competitivity is spreading to the surrounding counties.

That said, 95.5% of apartments in Broward County are currently occupied, with two-thirds of renters (66.9%) renewing their leases in peak rental season. And with newly built apartments representing only 0.83% of the area’s supply of housing, there are 14 apartment hunters competing for each unit. Moreover, on average, a vacant rental apartment in Broward County is occupied within 36 days.

Likewise, finding a rental apartment is also challenging in Orlando. With plenty of jobs available, the City Beautiful also ranked as one of the best places to raise a family in 2023, attracting many renters with children (as well as young professionals and students).

Orlando’s supply of apartments only increased by 0.77% in recent months, which is not enough to meet demand. As a result, apartment-seekers here have less than 5% of available apartments to choose from, especially as 65.3% of renters chose to renew their leases in peak rental season. In this case, the average apartment in Orlando is filled within 32 days, with 12 prospective renters competing for each available unit.

The Midwest is the next hot spot for renters seeking more bang for their buck

Apartments in the Midwest have been in high demand this busy summer, dominating the top half of the nation's 20 hottest list.

First up, Milwaukee emerged as the second most competitive rental market in the country in peak rental season, boasting an RCI score of 116. Yet, despite a 0.91% uptick in newly built apartments, newcomers are having a very hard time finding a rental here.

And, to make matters worse, many aspiring homeowners who are still unable to fulfill their dream amid rising interest rates and limited for-sale inventory are forced to continue renting in the area.

As such, 70% of apartment dwellers in Milwaukee chose to stay put in peak rental season, thereby pushing the occupancy rate to a high 96.1%. Under these circumstances, available rental apartments in Milwaukee fill within a month, with 16 renters competing for each vacant unit.

Suburban Chicago was the fourth-hottest rental market in the country, boasting an RCI score of 112. Surrounding the city of Chicago, smaller Chicagoland locations — such as Joliet, Aurora, Naperville, Elgin or Skokie in Illinois and stretching as far as Gary and Hammond in Indiana — offer more space and a less congested place to call home. Additionally, rising home prices in Chicago have been pushing more people in the area to rent rather than own where they live.

Furthermore, faced with surging demand in the busiest months for renting, Suburban Chicago climbed six spots since the start of the rental season, landing in fourth place. With less than 5% of the rentals here available and virtually zero apartments built recently, 67.3% of apartment dwellers in the area decided not to move in peak rental season.

At the same time, those looking for a new place have to compete with 14 other renters to secure an apartment. On average, a vacant unit in Suburban Chicago becomes occupied within 33 days — nine days faster than at the start of the rental season.

Similarly, Grand Rapids, MI, emerged as the fifth-hottest rental market in the country (RCI score of 108). Conveniently located halfway between Detroit and Chicago, Grand Rapids has a diverse economy with strong growth in manufacturing and health care, which offer good job opportunities. Plus, the metro is home to several colleges and universities, making it an educational hub in the region.

So, with merely 4.1% of the rentals here available and a very modest increase of 0.53% in newly built apartments, more than two-thirds (67.7%) of apartment dwellers renewed their leases in peak rental season. Here as well, the average vacant apartment is filled nine days faster than at the start of the rental season (33 days vs. 42 days, respectively).

Other Midwestern markets that are highly competitive in peak rental season include Omaha, NE; Kansas City, KS; Cincinnati; and Chicago.

Brooklyn, Manhattan help New York regain its appeal, fueling competition in the Northeast

While the Midwest is flexing its muscle in peak rental season, we’re seeing rising competition in the Northeast, as well. The main reason for this is New York’s remarkable progress in recovering from the pandemic’s economic effects: The city is very close to fully restoring its employment levels, according to a recent report by the NYC Economic Development Corporation.

However, New York is not an affordable place to live, so North Jersey (RCI score 113) lands among the best rental markets in the U.S., as it is the perfect choice for people who want to live close to the attractions in the Big Apple, but who are not willing to pay steep living costs. Thus, North Jersey is the third-most competitive rental market nationwide and the hottest renting spot in the Northeast.

Including places like Jersey City and Newark — as well as smaller locations scattered across the counties of Bergen, Essex, Hudson, Morris, Passaic, Sussex and Union — America’s third-most competitive rental market is still seriously undersupplied, even with a 1.19% increase in recently built apartments. That’s why 71.4% of renters here renewed their leases, pushing the occupancy rate to 96.3% in peak rental season. On average, available units are occupied within 34 days, with 15 prospective renters competing for one vacant apartment.

Coming in 11th nationwide, Brooklyn, NY, is a hot renting spot for those who love the thrill of New York City as it offers a great combination of more affordable housing than Manhattan, in addition to convenience and amenities. Here again, the borough’s supply of apartments is far from keeping up with demand: Recently built units only account for 0.16% of the total housing stock, which prompted two-thirds (66.2%) of renters to stay put this summer. This led to an occupancy rate of 96.1% in peak rental season. Meanwhile, the average vacant apartment is filled within 38 days, with nine people competing for it.

What's more, the number of office workers returning to Manhattan is on the rise, which is helping boost the local economy and create jobs — all while fueling competition for rental apartments. So, Manhattan joins our top 20 for the first time since the pandemic, claiming 13th place. Plus, with zero apartments opened recently, 66% of apartment dwellers chose to stay put during peak rental season. As a result, Manhattan has an occupancy rate of 94.7%. There are also nine renters vying for each vacant unit, which becomes occupied within 38 days, on average.

San Diego surpasses Orange County in terms of rental competitivity for the first time in almost two years

Meanwhile, in sunny — and increasingly unaffordable — California, the competition for rental apartments shifted from Orange County to San Diego for the first time in almost two years, largely due to the severe shortage of housing amid strong population growth in the metro. In fact, it is estimated that America's Finest City alone would need to build about 108,000 new units by 2029 in order to meet the need for housing.

Thus, San Diego is the most competitive rental market in Southern California, ranking 18th nationwide in the busiest months for renting. Faced with a limited supply of land for new development (which then hinders new apartment construction) San Diego has an occupancy rate of 96%, with 51.3% of renters renewing their leases. Here, it takes a little more than one month (33 days) for vacant units to be filled, and there are 17 apartment-seekers competing for one available rental.

Next up is Orange County, where the 0.23% uptick in newly built apartments was not enough to meet the continued demand for housing, prompting 61% of renters to stay put in peak rental season. As a result, apartment-seekers in this area have very few options to choose from, as the occupancy rate is 95.7%. On average, it takes 40 days for vacant units to become occupied here, and 13 prospective renters vie for the same unit.

Small markets: Harrisburg, PA, is red-hot, while apartments in Fayetteville, AR, get snatched the fastest in the nation

Many small cities in the Northeast have seen an influx of new residents in recent years. This is mostly due to the rising costs of living in major hubs in the region and elsewhere in the country, as well as the availability of remote work and solid student enrollment. Granted, this has put even more pressure on these already undersupplied smaller markets, making it very difficult to find an apartment during the busiest months for renting.

Harrisburg, PA, emerged as the most competitive small rental market in the U.S. in peak rental season, with an RCI score of 127. With zero new apartments built recently and less than 4% of existing units available, almost three-quarters of apartment dwellers here decided to stay put. This means 16 apartment hunters compete for the same vacant unit, which is occupied in about 34 days, on average.

Next, Fayetteville, AR, is the nation’s second-most competitive small rental market, with an RCI score of 125. This northwest Arkansas location keeps drawing in both students and workers, but its 0.7% share of recently built rentals barely made a dent in its supply of housing.

So, with very few options to choose from, 74.7% of renters here renewed their leases, pushing the occupancy rate to an extremely high 97.3% in peak rental season. Accordingly, vacant apartments are occupied within a whopping 18 days — the fastest among all markets analyzed — with 17 prospective renters competing for each unit.

Coming in third was Providence, RI (RCI score 125), which is home to several colleges and universities as well as a hub for sectors like health care, education, finance, manufacturing, and tourism — all of which attract more and more people to move to the city and compete for rental apartments.

However, the supply of housing is very limited in Providence, especially as no new apartments have been opened in the area recently. Thus, with less than 4% of units available in the area, 67.3% of renters chose to renew their leases in the busiest months for renting. As a result, it takes more than one month for the average vacant apartment in Providence to be filled, and 20 people compete for the same unit.

Other small markets in the Northeast that were highly competitive in peak rental season include Portland, MELehigh Valley, PA; Rochester, NY; Albany, NY; Buffalo, NY and White Plains, NY.

Completing the top 20 for small rental markets were: Madison, WI; Asheville, NC; Knoxville, TN; Little Rock, AR; Tulsa, OK; Wichita, KS; Fort Wayne, IN; Lafayette, IN; South Dakota; Buffalo, NY; El Paso, TX; and Fayetteville, NC.

Click on the tabs below to see the rental competitivity in each region:

Methodology

To compile this report, RentCafe.com’s research team analyzed Yardi Systems apartment data across 139 rental markets in the U.S. The data comes directly from market-rate large-scale multifamily properties of at least 50 units. Fully affordable multifamily properties were excluded from the analysis.

The markets were ranked based on a market competitive score. To calculate each market’s score, we ranked them according to five metrics and their averages for April through June 2023: apartment occupancy rate; average total days vacant; prospective renters per vacant unit; renewal lease rate, and share of new apartments completed during the same timeframe.

We then compiled an average ranking by assigning a percentage weight for each metric: 30% for apartment occupancy rate; 15% for average vacant days; 15% for prospective renters per vacant unit; 30% for renewal lease rate; and 10% for the share of new apartments.

In this study, the terms “market,”, “area,” “metro,” “location” and “place” are used interchangeably and are as defined by Yardi Matrix markets.

Fair use and redistribution

We encourage you and freely grant you permission to reuse, host, or repost the research, graphics, and images presented in this article. When doing so, we ask that you credit our research 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.

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Veronica Grecu is a senior creative writer and researcher for RentCafe. With more than 10 years of experience in the real estate industry, she covers a variety of topics in 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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