Miami maintains the top spot as the most competitive rental market
In the midst of this year’s summer transfer season, Miami retained its title as the most competitive rental market in the United States. However, the Midwest, with its affordability and diverse housing options, has emerged as the most preferred destination for apartment seekers. This trend indicates a shift in the preferences of renters, who are increasingly attracted to areas that offer a combination of budget-friendly living and quality of life.
The Midwest’s rising popularity can be attributed to several factors, including the presence of major companies such as Amazon, Walmart, and Ford Motor Company, which have recently expanded or moved to the region. This influx of companies not only boosted the Midwest economy, but also fueled competition in the rental market. As a result, individuals from states with higher costs of living, such as California, Florida, Texas, and North Carolina, are now considering the Midwest as a viable option for improved housing and employment opportunities.
Among the top performers in the Midwest, Milwaukee saw a notable rise from seventh to second place in the rental market rankings. The jump moved Milwaukee ahead of the notoriously competitive North Jersey market, which fell to third place.
New York and its surrounding areas, including Brooklyn and Manhattan, continued to attract renters in the Northeast, appearing in the top 15 rental markets this season.
Competition in the rental market
To measure the competitiveness of the rental market, the Rental Competitiveness Index (RCI) was calculated by Yardi. During peak rental season, the national RCI score was 60, indicating moderate competitiveness in the apartment market during the busiest time of the year.
The influx of new apartments onto the market over the past two years has increased rent options for tenants compared to the previous year. This expansion resulted in a national occupancy rate of 94% during peak rental season in 2023, down from the 95.3% rate seen at the height of last year’s rental frenzy. The increased supply has provided tenants with more options, with only 60.5% of apartment residents choosing to renew their leases this season, a decline from the 63.6% lease renewal rate observed during the same period last year.
As a result of the expanded selection, the time taken to fill available apartments has increased, taking five days longer this year compared to the previous year (37 days versus 32 days). Additionally, there was a 33% decrease in the number of potential renters competing for each available unit compared to last year, with only ten apartment seekers competing for the same vacant unit this season, compared to 15 last summer.
It is noteworthy that more than half (54%) of the 139 US markets analyzed saw a decline in competitiveness across all relevant metrics compared to the previous year. It is worth noting that two common signs of a decline in the rental market are an increase in the number of days that apartments remain vacant and a decrease in the number of renters competing for each available unit.
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Despite the competitive landscape in the Midwest, Miami remains the most competitive rental market in the United States during peak rental season, with an RCI score of 122. However, Miami faces challenges, including a declining population for the first time in half a century, a The standard of living. Housing costs and insufficient supply of rental units. Despite efforts by developers to build new apartments in the area, renters in Miami are still struggling to find available rentals, with an occupancy rate as high as 97.1%.
In Broward County, another part of South Florida, the rental market remains strong (RCI score of 98), ranked ninth nationally, closely followed by Orlando at 10th (RCI score of 98). Broward County’s popularity is due to its appeal to retirees and professionals seeking opportunities in technology, finance, and health care. With 95.5% of apartments occupied and 66.9% of tenants renewing their leases during peak rental season, competition remains strong.
In Orlando, a limited oversupply of apartments and high demand have led to a shortage in supply, with only 5% of apartments available for rent. As a result, 65.3% of tenants chose to renew their leases, resulting in an average occupancy period of 32 days and 12 potential tenants competing for every available unit.
(Read more: Miami, Los Angeles and New York’s list of US cities with the most “poor” homeowners)