Almost two-thirds of renters renewed leases in 2022 in a market that’s still hindered by record home prices and surging interest rates, RentCafé says in their year-end report for 2022.
At the national level, vacant apartments were occupied within 32 days, on average and as many as 14 prospective renters competed to secure a lease for a rental apartment in 2022.
The reason so many leases were renewed is because 95.3 percent of apartments were already occupied, so finding a new rental was not easy in 2022 — especially because newly built units only represented 1.5 percent of the nation’s total housing supply, the RentCafe report says.
Where were hottest rental markets in 2022
To find out the hottest rental markets in 2022 RentCafe.com analyzed the 135 largest markets in the U.S. where data was available. Specifically looking at five important metrics that affect a location’s competitivity:
- the number of days apartments were vacant
- what percentage of rentals were occupied
- the number of prospective renters competing for an apartment
- what percentage of renters renewed their leases
- the share of apartments completed this year
Based on these metrics, “we calculated a Rental Competitivity Index (RCI), which shows how competitive the rental market was this year,” the report says.
The national RCI score was 59.9 in 2022.
The most competitive rental markets in 2022 scored over 100 out of 130.
“Boasting an RCI of 118, Miami was by far the hottest rental market in the U.S., due to record-high occupancy and high lease renewal rates. Here, a combination of factors — including the lack of state income tax, business-friendly climate and booming tech scene — attracted droves of millennials and even Gen Zers looking to work and live in the Sunshine State,” the report says.
Low-supply Orange County is the hottest renting spot in SoCal
It’s no secret that the ever-increasing cost of living in Los Angeles and rising housing prices are pushing many renters to seek new homes in less expensive locations in Southern California — with a preference for apartments in Orange County. And, with a strong economy and diverse job pool fueled by the booming e-commerce sector, the OC is overheated due to low supply.
Another competitive location in SoCal was San Diego. Yet, despite consistently being ranked as one of the most expensive places in the country, it’s still not as expensive as Los Angeles or San Francisco. Notably, the median age is around 35 and high-level job opportunities abound in high tech, education, research, military, defense and health care.