According to a new study from RentCafe, an estimated 44 million American households living in rental homes, as renting remains at its highest level in half a century. For some renters, finding a new residence was difficult in 2022 — especially in the South Florida area.
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, with Miami-Dade ranking as the hottest area for renting in the U.S.
RentCafe.com analyzed the 135 largest markets in the U.S., looking at five important metrics that affect a location’s competitivity:
- Number of days apartments were vacant
- What percentage of rentals were occupied
- Number of prospective renters competing for an apartment
- What percentage of renters renewed their leases
- Share of apartments completed this year
Then based on these metrics, we calculated a Rental Competitivity Index (RCI), which shows how competitive the rental market was this year. The national RCI score was 59.9 in 2022.
Two-thirds of renters renewed leases this year
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.
To further complicate matters — and with homeownership out of reach for many aspiring homebuyers, on top of rapid inflation — renters are increasingly choosing to renew their leases. Almost two-thirds of renters nationwide chose to renew their leases this year instead of moving into a new place or taking the leap to homeownership in a market that’s still hindered by record home prices and surging interest rates.
With 95.3% of apartments already occupied, finding a new rental was no easy feat this year — especially because newly built units only represented 1.5% of the nation’s total housing supply. New apartments also opened faster in Florida’s largest metros than anywhere else in the U.S. this year. Even so, this was still not enough to keep up with soaring demand in an already popular area.
The most competitive rental markets in 2022 scored over 100 out of 130
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.
With almost all apartments in Miami occupied, those looking for a rental here found themselves in a very tight spot, especially as 75% of apartment dwellers chose to stay put this year. As a result, on average, a record 32 renters competed for a vacant apartment in Miami, and rental units were filled in 25 days. And, although the number of apartments in the metro increased by a staggering 2.8% in the first part of the year (a record growth among the top 20 cities in our ranking), that’s still far from meeting the high demand for rentals.
The second most competitive rental market this year was Grand Rapids, Michigan, with an RCI of 112.6. This thriving yet laid-back location in western Michigan continued to attract lots of young professionals and families from more expensive cities from throughout the country, including Detroit, Chicago and Phoenix.
Due to a surge in popularity in the last few years, finding an apartment for rent in Grand Rapids was no picnic in 2022, especially as hardly any new units were opened in the first part of 2022, which pushed the city’s occupancy rate to a high 96.9%. At the same time, nearly 70% of renters here chose to renew their leases this year. Simply put, there was not enough housing to go around, which only increased demand in Grand Rapids in 2022. As a consequence, no less than 18 prospective renters, on average, competed for each apartment here and vacant units were filled in about 28 days.
Meanwhile, in Orlando — the third most competitive rental market in the nation, with an RCI score of 109.3, as well as the second hottest renting spot in Florida — renters had very few options to choose from, even though the apartment supply grew by 2.2% this year. Here again, 72.5% of apartment dwellers chose to stay put in 2022, so 96.8% of apartments for rent in Orlando were occupied. And, with 21 prospective renters competing for an apartment, the average vacant rental in Orlando was filled in 28 days.
Despite adding 34,000+ apartments this year, Florida still can’t keep up with the influx of newcomers
Five of the country’s hottest locations for renters this year were in Florida, as the number of people migrating to the Sunshine State grew tremendously in the last two years.
After a few slow years, in 2022 developers in Southwest Florida — including cities like Sarasota, Fort Myers, Bradenton, Naples, Port Charlotte, Venice and Cape Coral — were building new apartments almost as fast as those in Miami. Still, that was not fast enough to accommodate demand in the region. What’s more, about 73% of renters renewed their leases in Southwest Florida this year. On average, it took 31 days to fill a vacant unit in Southwest Florida, with 16 prospective renters competing to secure each apartment. Therefore, this corner of Florida has an RCI score of 93.4.
Northeastern markets lure remote workers seeking extra space within their budget
This year’s top 20 hottest rental markets in the U.S. included seven metros in the Northeast, which gained traction as more affordable alternatives to pricier East Coast cities, like New York, Philadelphia or Boston.
Specifically, Harrisburg, Pennsylvania, was the nation’s fourth most competitive rental market this year. This was primarily due to its lower cost of living compared to many of the larger metro areas in the Northeast, as well as its family-friendly community and proximity to the great outdoors. Another advantage to living in Harrisburg is its relative proximity to Philadelphia, Pittsburgh and Baltimore.
With no new apartments opened this year (at least through August), three-quarters of those renting in Harrisburg chose to renew their leases. This then pushed the occupancy rate to a high 96.5%. Accordingly, a vacant rental here was filled after 33 days, on average, with 18 prospective renters competing for one apartment.
The nation’s fifth most competitive rental market was North Jersey, where many working-from-home renters who fled crowded Manhattan found solace in larger, more affordable apartments during the pandemic. Then, as remote work gained momentum, many of them decided to make this part of New Jersey their permanent home. Some of the best examples are Jersey City (with the added perk that the Lower Manhattan skyline looks even more stunning from this vantage point) and Newark, both of which are located within 45 minutes of the Big Apple by train. As a result, Central Jersey and North Jersey were almost twice as competitive as Manhattan in 2022, boasting RCI scores of 96.8 and 107.5, respectively.
Thanks to its rising popularity, North Jersey’s apartments’ very high occupancy of 97.2% was only surpassed by apartments in Miami, despite an increase in new apartments of 2.1% this year. So, on average, a vacant apartment here was filled in 32 days, with as many as 21 prospective renters competing for one. And, once again, almost three-quarters of the renters in this area renewed their leases instead of moving into a new place, making the rental market even more competitive.
To read the full report, including more charts and methodology, click here.
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