With more than two-thirds of renters renewing their leases and an average occupancy rate of more than 95%, this year’s rental market was competitive, according to a new report from RentCafe.
RentCafe.com’s 2022 Year-End report analyzed five metrics in the 135 largest markets to determine a Rental Competitivity Index (RCI): 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, and the share of apartments completed this year.
The report found that the national RCI score 59.9 in 2022. In addition, with demand climbing up in almost every metro, the report found that renters had the hardest time finding an apartment in Miami, Orlando, Grand Rapids and North Jersey.
Key highlights:
- Miami-Dade, Florida, was the hottest rental market in 2022, due to a high occupancy rate of 97.5% and a staggering 75% of renters deciding to stay put and renew their leases. As a consequence, despite the area’s supply of apartments growing by 2.8% in 2022 compared to last year, a record 32 renters competed for one vacant apartment, which got snatched in 25 days, on average.
- In fact, Florida was this year’s renting hotspot: five of the nation’s hottest places to rent were in the Sunshine State, with Orlando being the third most competitive rental market nationwide, followed by Southwest Florida, Broward County, and Tampa.
- Apartment hunting intensified in the Midwest, especially in areas with slow construction like Grand Rapids, Milwaukee, Omaha and Lansing – Ann Arbor, all of which continue to attract young professionals from pricier metros across the country.
- Despite a modest 0.8% uptick in supply, renters in Grand Rapids faced the second toughest market this year: no less than 18 people competed for a vacant apartment, which got filled in 28 days. Meanwhile, Grand Rapids’ occupancy topped at almost 97%, prompting around 70% of renters to renew their leases.
- The Northeast continued to lure remote workers seeking extra space and better deals — so much so that seven northeastern markets were among the 20 hottest. Harrisburg, where virtually no new apartments were added this year, emerged as the regional leader, ranking 4th nationwide for competitiveness.
- Central Jersey was 2x more competitive than Manhattan this year. The area had the highest lease renewal rate in the nation (85%) and an average occupancy rate close to 97% (all the while the apartment supply increased by only 0.9%). That said, finding an apartment was quite challenging for most people in the area, as 15 renters competed for an apartment, on average. North Jersey renters were in a similar situation, despite an increase of 2.1% in apartments.
- On the West Coast, California’s low-supply Orange County was the hottest renting spot, followed by San Diego, both of which continued to attract renters from Los Angeles and San Francisco. In fact, Orange County and San Diego were the only California markets to reach our top 20 this year.
- Orange County was the 8th most competitive rental market nationwide. The low increase in supply (0.6%) failed to accommodate apartment seekers looking for rentals in a city where less than 3% of the apartments were vacant. Similarly, an average of 22 renters competed for a vacant apartment in San Diego, which ranked 13th nationwide.
Major takeaway:
“With around 44 million American households living in rental homes, renting is at its highest level in half a century. But, for some renters, finding a new place to call home was no easy task in 2022 — especially in the highly coveted South Florida area, which has long been a favorite relocation spot for people from all around the country,” said Veronica Grecu, senior creative writer and researcher for RentCafe and author of the report. “Moreover, in the last two years, looser regulations and the widespread adoption of remote working attracted even more people to settle in the Sunshine State. As a result, newcomers found themselves competing with those who were already hunting for apartments in the area, making Miami-Dade the hottest area for renting in the U.S.”
For the full report, click here.
