America’s hottest rental markets are no longer in the Sunbelt states, but now in the Northeast, according to a new RentCafe calculation.
“Sunbelt states have long been highly coveted renting spots, particularly during the pandemic. However, the start of 2023 saw a pivot to markets located in the Northeast,” the report says.
- The national competitivity score is 60 out of 126 at the start of the year, with vacant apartments occupied within 38 days, on average.
- North Jersey is the most competitive rental market in the U.S., outpacing the Sunbelt.
- Eight of the nation’s 20 most competitive markets for renting are in the Northeast.
- Apartments for rent in Brooklyn and Boston are so sought-after that these two markets entered our top 20 most competitive markets for the first time after several years of sluggish demand.
- What’s more, finding apartments is becoming increasingly difficult in small, low-profile markets across the U.S.
- Lafayette, IN, is America’s hottest small-sized rental market. The high demand for housing from students, faculty staff and residents pushed the occupancy rate to 96.8% amid a 73.8% lease renewal rate at the start of the year.
- The housing shortage is also felt in quiet cities like Portland, ME, and White Plains, NY, while the budget-friendly Worcester-Springfield, MA, area near undersupplied Boston is rapidly gaining popularity.
- A wave of transplants coming from gateway cities is putting pressure on the rental market in Wyoming.
RentCafe has ranked the most competitive rental markets in the U.S by analyzing the 134 largest markets in the U.S. where data was available.
Here are the metrics they used to determine how competitive a rental market is.
- The number of days apartments were vacant
- The percentage of apartments that were occupied by renters
- The number of prospective renters competing for an apartment
- The percentage of renters who renewed their leases
- The share of new apartments completed
RentCafe said in the report. “As the new year began, vacant U.S. apartments were occupied within 38 days, on average, with 8 prospective renters competing for each available apartment amid an occupancy rate of 94.2 percent.”
“At the same time, 60.7 percent of apartment dwellers renewed their leases. Plus, with the number of newly opened apartments accounting for an extremely modest 0.43 percent of the nation’s housing supply, finding a new place to call home can become challenging this time of the year.
“By comparison, one year ago, vacant apartments were filled almost one week faster and there were three more people applying for the same rental. This was especially significant because more renters (64.7 percent) chose to renew their leases and newly built apartments represented only 0.75 percent of the total apartments in the U.S. These factors then led to 95.6 percent of apartments being occupied at this time last year,” the report said.