theMReport.com Your trusted source for mortgage banking news
The Midwest was the most competitive region for renting in 2023 with three of its markets making the top five nationwide, according to RentCafe's 2023 Year-End Report.
As most of the U.S. shows signs of softening in rental competitiveness, Midwestern markets are bucking the trend. Specifically, the region’s lower cost of living, ample living spaces that bode well with remote work, and almost instant access to the great outdoors are attracting more and more renters.
While the Midwest is experiencing an economic revival, on the other hand, Miami was the nation’s hottest rental market in 2023. The metro’s thriving tech scene continues to attract innovators and entrepreneurs from all around the world, driving the competition for rental apartments.
Top 10 Most Competitive Rental Markets in 2023:
- Miami-Dade County, FL
- North Jersey, NJ
- Milwaukee
- Grand Rapids, MI
- Suburban Chicago, IL
- Omaha, NE
- Broward County, FL
- Suburban Philadelphia, PA
- Brooklyn, NY
- Central Jersey, NJ
Of course, many people were looking for a new place to call home throughout this year, especially during the moving frenzy in the peak rental season. Some sought to enjoy the amenities and opportunities of urban living in places like North Jersey or Milwaukee, while others chose more laid-back locations like Fayetteville, AR, or Providence, RI.
So, as the year draws to a close, what were the most competitive markets in 2023? To find out, RentCafe.com analyzed the 139 largest markets in the U.S. where data was available and ranked them based on five key metrics when it comes to rental competitiveness.
These metrics included:
- Number of days apartments stayed vacant
- Percentage of rentals that were occupied
- Number of prospective renters competing for an apartment
- Percentage of renters who renewed their leases
- Share of apartments completed this year
With a surge of new apartments in the market, fewer U.S. renters renewed their leases this year.
As 2023 comes to an end, it’s evident that the U.S. rental market has been shaken by the flood of new apartments opened in the last few years, as well as the lingering economic turmoil—so much so that all metrics used in this competitivity report have been affected.
First, vacant apartments stayed on the market for 38 days, on average, with nine prospective renters competing for each available unit. That’s almost one week longer than last year (32 days) when as many as 14 apartment seekers were competing for the same available unit.
Meanwhile, about 94% of the rental apartments nationwide were occupied, which was significantly below the 95.3% occupancy rate at the end of 2022. That’s mainly because renters had more apartments to choose from this year as 1.89% of the available rental units have been built since January. By comparison, in 2022, the share of newly built apartments represented just 1.5% of the available units during that year.
Furthermore, as new apartments surged this year, many renters chose to move out rather than renew their leases. More precisely, 60.2% of renters decided to stay put in 2023 as opposed to the 62.7% of renters who renewed their leases at the end of 2022.
Additionally, in at least four of the five relevant metrics for competitivity, some 86% of the 139 rental markets analyzed became more relaxed in 2023 than they were last year. Notably, most of these markets experienced a drop in their shares of lease renewals and a marked increase in the number of days it took for apartments to be filled. At the same time, undersupplied locations where no new apartments were built in 2023 (mostly small markets with outdated inventory, like Providence, RI, and Little Rock, AR) saw fierce competition among renters throughout the entire year.
Miami leads the nation, ranked the most competitive market, with North Jersey on its heels.
With an RCI score of 122, Miami was the hottest rental market in the U.S. in 2023, fueled once again by sky-high occupancy and lease renewal rates amid a veritable building frenzy. Despite thousands upon thousands of new apartments being added to the market throughout the last few years, the metro continues to welcome new residents seeking better job opportunities and a tax-free lifestyle. Likewise, many wealthy domestic buyers purchased condos for themselves rather than renting them out, which only dwindled the number of apartments available for prospective renters this year.
Although the number of apartments for rent in Miami has grown by a healthy 3.7% since January, the newly built units were still not enough to meet the demand for rentals this year. On top of that, 71.2% of renters choose to stay put, meaning apartment seekers had a very hard time securing an available unit in 2023. That’s why there were 22 applicants fighting for each vacant rental (more than double the national average), with apartments being taken off the market quickly, often within one month.
Fueled by a mix of high home prices and insufficient supply—sprinkled among inflation concerns and above-average property taxes—North Jersey was America’s second hottest market in 2023 with an RCI score of 116. It was also the only Northeastern market to score above 100 points in our current ranking.
In fact, the metro has become a hot spot for renting throughout the pandemic, attracting many Millennials looking for more affordable housing options outside of major rental hubs like New York City: It ranked fifth in terms of rental competitiveness at the end of 2022 and then swiftly moved to first place at the start of 2023.
The Midwest dominated rental market competition in 2023.
Riding the remote work trend, many renters seeking more bang for their buck are choosing to relocate to the Midwest, where they can enjoy more space and a relatively affordable cost of living. In addition, more than two-thirds of apartment dwellers renewed their leases in almost all Midwestern locations, which only intensified the competition for rental apartments in the region.
As a result, the Midwest emerged as the hottest region for renting in 2023: It boasted 10 entries in our ranking of the top 30 most competitive markets, including four that earned RCI scores above 100.
The nation’s third-hottest rental market this year—and leading in the Midwest—was Milwaukee (RCI score 113), where more than half of the population rents, according to the U.S. Census Bureau. With less than 5% of its apartments available at any given time and a staggering 69.6% of the current renters choosing to stay put, those looking for rental apartments in Milwaukee found themselves in a tight spot in 2023.
Even though the local supply of housing has grown by 2.91% since January, the demand is so high that most apartments only stay on the market for 33 days, with 14 renters competing for each available unit.
Another highly sought-after renting spot in the Midwest and in the U.S. overall was Omaha, NE (RCI score 107), which claimed sixth place in our ranking. Offering a great balance between space, cost of living and career opportunities, Omaha has been attracting more and more attention from newcomers in recent years. However, insufficient supply makes it a real challenge to secure a rental property.
While new apartment listings surged, the Northeast remained a tough market for renters.
With its many universities, diversified economy and high employment rates in pricey metro areas like New York, Boston and Philadelphia, the Northeast attracts a large number of people. This includes younger generations that are seeking housing options that better fit their budgets while still enjoying big-city amenities.
For example, renting in Suburban Philadelphia has become more financially attractive since the pandemic—largely due to remote work and the appeal of more space—making the area more and more competitive. Thus, in 2023, Suburban Philadelphia emerged as the second-hottest rental market in the Northeast and the eighth-hottest in the U.S. with an RCI score of 99.
Despite a marked increase in new apartments, finding an apartment for rent in Brooklyn, NY (#9 with an RCI score of 98) was anything but easy—sometimes not even for deep-pocketed renters moving in from across the East River. Plus, faced with insufficient supply amid above-average mortgage rates, many aspiring homebuyers prefer to keep renting, thereby adding pressure to an already tight rental market.
That said, 64.6% of those already living in rental apartments in Brooklyn chose to renew their leases in 2023, driving the borough’s occupancy rate to 96.1%. On average, vacant apartments stayed on the market for 38 days here, and nine applicants competed for each available unit. Manhattan, on the other hand, only made it to 22nd place among the nation's 30 hottest rental markets in 2023.
One possible reason is that Manhattan has more upscale properties than Brooklyn, which can deter renters who are looking for better options, by making the market less competitive.
Apartments are renting in just 18 days in Fayetteville, the U.S.' hottest small rental market.
While large urban metros may be appealing to many renters, small-town living still has its charm for those seeking better housing options within their budget. However, finding a rental apartment in small-sized markets was not easy this year for either newcomers or existing renters, especially in places with high demand from students looking for off-campus housing near their schools. In fact, the nation’s top three hottest small rental markets scored the maximum number of points for competitivity, which was 126.
Fayetteville, AR, emerged as the most competitive rental small rental market in 2023. Its economy is bolstered by the presence of the University of Arkansas, and also by the growing Northwest Arkansas region. Additionally, the city has been working toward branding itself as the Startup City of the South by focusing on retaining talent, developing green jobs and fostering a sustainable business climate.
But, with an astronomical occupancy rate of 97.2% and more than three-quarters of the current renters renewing their leases, finding an available apartment in Fayetteville this year was like "finding a needle in a haystack", according to RentCafe experts.
Top 10 Hottest Small Rental Markets in 2023:
- Fayetteville, AR
- Providence, RI
- Harrisburg, PA
- Portland, ME
- Knoxville, TN
- Lehigh Valley, PA
- Madison, WI
- Asheville, NC
- Tulsa, OK
- Little Rock, AR
Moreover, the demand for housing in Fayetteville was so incredibly high that most apartments were occupied in just 18 days (the fastest in the nation), with an average of 18 prospective renters competing for each available unit. Even the 2.3% increase in the number of apartments was not enough to quench renters’ thirst for housing this year.
In the same way, Providence, RI, was the second most competitive small rental market in 2023. This severely undersupplied college town is also a top relocation spot for new residents coming from nearby Hartford, CT, as well as large cities like Boston, New York, and San Francisco.
Both newcomers and those already living in rental apartments in Providence faced fierce competition this year. On top of that, almost 68% of apartment dwellers in Providence renewed their leases, driving the occupancy rate to a high of 96.6%.
Besides Fayetteville, only six other small renting spots added to their supplies of housing this year, most of which were located in the Midwest. For example, the number of apartments in Rochester, MN, grew by 3.1%, while the rental market in South Dakota saw a 3.9% uptick in its housing supply, which led to fewer renters renewing their leases.
Despite the 2.8% increase in the supply of apartments, nearly 80% of the apartment dwellers in Lehigh Valley, PA, chose to stay put, rather than risk the competitive search for a new rental.
Other small rental markets that were competitive in 2023 included: Portland, ME; Knoxville, TN; Madison, WI; Asheville, NC; Tulsa, OK; Little Rock, AR; Wichita, KS; Lafayette, IN; Albany, NY; Rochester, NY; Buffalo, NY; Youngstown, OH; Fort Wayne, IN; El Paso, TX; Fayetteville, NC; North Dakota; South Bend, IN; Worcester-Springfield, MA; Palm Beach County, FL; White Plains, NY; Toledo, OH; and Chattanooga, TN.
To read the full report, including more data, charts, and methodology, click here.
