The U.S. rental market is experiencing heightened competition as apartment occupancy remains robust at 93.3%, slightly higher than the previous year. February marks the onset of the historically busy rental season, with rents poised to climb through the summer months. Notably, Miami stands out as a major hub for renters due to its strategic location and tax advantages.
Miami, often referred to as "Wall Street South," is attracting professionals and businesses, making it the hottest rental market in the country.
"Throughout the last few years, Miami has established itself as 'Wall Street South,' attracting major banking institutions and investment firms, while existing industries like tech and healthcare continue to grow, bringing in more workers," – Veronica Grecu, senior creative writer and researcher for RentCafe.
The city's appeal is undeniable, with its lack of income tax and position at the crossroads of the Americas serving as significant draws. Suburban Chicago ranks second behind Miami, illustrating the Midwest's overall lead in rental market competitiveness.
Despite last year's completion of nearly 600,000 multifamily units, fierce competition persists. RentCafe's Rental Competitiveness Index indicates an increase in national rental competitiveness at the start of this year. The demand is intense, with an average of seven applicants vying for each available apartment.
New York City, Dallas, and Austin have spearheaded new rental developments, reflecting a surge in new units. However, even with record-high apartment construction last year, the influx of supply has not tempered the competitive landscape. In fact, New York City emerges as the most competitive market, with an average of 14 applicants per unit.
Nationwide, lease renewal rates have risen to 63.1% this year from 61.5% last year. Despite this surge, rents are still 0.4% lower than they were in February of last year. Nevertheless, February saw a 0.3% increase in rents, marking the first monthly rise after six consecutive months of declines.
"Year-over-year rent growth has now been negative since June 2023, but in recent months, there are signs that a return to positive growth is on the horizon," – ApartmentList report's authors.
The typical rent price remains 20% higher than it was in January 2021, underscoring persistent upward pressure on rents despite recent fluctuations.