Rising lease-renewal rates and 94% occupancy has made the rental market tighter than ever, according to RentCafe.
“Those hoping for a smoother renting journey in 2024 may need to adjust their expectations,” the latest rental competitive report says. The number of potential renters per apartment remains high.
How the rental market has heated up compared to last year:
- More renters are choosing to stay put, with the lease-renewal rate rising to 62.0% (up from 60.5% in peak season 2023).
- Additionally, fewer available units and strong demand are keeping the occupancy rate at a high 93.7% (a marginal 0.3% decrease from 2023).
- Limited options mean a high number of applicants for each vacant apartment: The number of prospective renters per apartment has barely shifted, dropping from 10 to 9 since last year.
- The quick turnaround on vacant units is leaving less time for decision-making, as the average number of vacant days for an apartment is 39 (just 2 days up from 37 last year).
- The share of new apartments has dropped from 0.86% last year to 0.65% this peak season, slowing the addition of modern rentals and leaving renters with fewer options to choose from.
- Based on these metrics, “We calculated a Rental Competitiveness Index (RCI) of 75.8 for the peak moving season, up from 69.4 in 2023, indicating a more competitive U.S. rental market,” RentCafe says in the report.
Why renters prefer to renew leases
In many cases, renters prefer to renew (as opposed to searching for a new place) during the moving rush because it helps them avoid rent increases that typically come with signing a new lease while potentially getting renewal incentives, the report says.
“This choice often helps renters save money on moving costs, application fees and security deposits. Choosing to renew their leases also allows renters — especially families with children in school — to remain settled for longer. Of course, home prices and mortgage rates are also keeping potential homebuyers in the rental market longer,” RentCafe says.
