Construction of new apartments last year hit record highs, but all of that new supply seems not enough to cool competition in the market. Getting a rental is actually even more difficult, according to a new report from Rentcafe, a search site for apartments.
Last year, developers completed nearly 600,000 multi-family units, according to the US Census. This is the highest level since 1974, and has increased by 34% since 2023. New York City, Dallas and Austin, Texas, lead the number of new rentals.
Nevertheless, rental competitiveness increased earlier this year, according to Rentcafe’s Rental Competitiveness Index. That’s mostly because the number of renters isn’t increasing.
According to Rentcafe, lease renewal rate rose to 63.1% earlier this year, compared to 61.5% early last year. Much of this could be due to rising mortgage rates and rising prices in the housing market for sale.
The apartment occupancy rate is firmly held at 93.3%, slightly higher than the beginning of last year. Additionally, landlords offer longer lease periods, and according to the report, the renewal period will be extended. As a result, each available apartment has an average of seven applicants.
Locally, Miami has the highest occupancy rate. It is the most competitive, with an average of 14 applicants for each unit.
“For the past few years, Miami has established itself as the Wall Street South, attracting major banking institutions and investment companies, and existing industries such as technology and healthcare continue to grow and attract more workers.” “And that location at the intersection of Miami’s lack of income tax and the US remains a major draw for experts and businesses.”
However, the Midwest leads the overall rental competitiveness. Of the top 20 hottest rental markets, 10 are in the region, with Chicago suburbs in second place behind Miami. Others include Detroit, Lansing, Grand Rapids and Cincinnati in Michigan. Milwaukee; and Paul of Minneapolis-St. Minnesota.
Rents, which had been eased, have once again been increasing. Nationally, rents rose 0.3% in February, and the first monthly advance in rents increased after a sixth consecutive month of decline, according to ApartmentList. February marks the start of a historic busy season in the rental market, with rents expected to rise throughout the summer. However, rents are 0.4% lower than last February.
According to ApartmentList, after the record rent growth periods for 2021 and the first half of 2022 and the first half of 2022 rent growth periods, it totaled 4.6% below its August 2022 peak (below $67 a month). However, typical rent prices are 20% higher than January 2021.
“Year-on-year rent growth has been negative since June 2023, but there have been signs of a return to positive growth on the horizon over the last few months,” according to the author of the apartment list report.
