- Miami-Dade County is the most competitive rental market in the United States.
- The Chicago suburbs came in second, followed by northern New Jersey.
- Across the country, housing shortages and rising rents continue to pose challenges for renters.
Much of the city’s real estate is becoming increasingly unaffordable, As millennials finally start to settle down, suburban areas are becoming more popular, and nowhere is that more evident than in Miami-Dade County, Florida, the most competitive rental market in the country, according to a new report from RentCafe.
The report ranked 137 U.S. rental markets by taking into account the market’s rental vacancy rate, the number of days homes were on the market, the number of potential tenants competing for each home, the percentage of tenants who have renewed their leases, and the percentage of new homes completed this year.
Suburban Chicago and northern New Jersey came in second and third, respectively. Several other Midwestern areas, including Grand Rapids, Michigan, and Milwaukee, also ranked in the top five most competitive rental markets.
The recent surge in competition in the rental market is driven by a severe housing shortage — recent estimates put the U.S. at a shortfall of about 4.5 million homes — while high interest rates over the past few years have put many would-be homebuyers off buying and discouraged many baby boomers from downsizing.
The situation of renters is worsening, with their median net worth at 40 times lower than the median homeownerWhile rent growth slowed last year, rents for single-family homes nationwide are still up about 36% compared to before the pandemic, while rents for apartment complexes are up about 23%.
The rise in remote work caused by the pandemic has helped accelerate certain migration trends, such as millennials leaving cities for the suburbs and people from across the U.S. flocking to the Sun Belt, including Florida.
Increasing competition
In Miami, a surge in new residents is making housing more expensive than ever before: There are an average of 19 other potential tenants competing for every rental property, and 96.5% of rental units are already occupied.
But Chicago is catching up. Young people looking to move to the suburbs are competing with 13 other potential tenants for each rental home, on average. Just over 95% of rental units are occupied, 68.7% of tenants are choosing to renew their leases, and few new apartments have been built in the area recently, RentCafe found.
In suburban Chicago and northern New Jersey, renters and homebuyers are increasingly being attracted to new amenities that appeal to younger generations, from neighborhoods within walking distance of restaurants.
High housing costs have left many renters unable to afford to buy and continuing to live in their apartments, the report found. Nationwide, 62.4% of apartment dwellers renewed their leases this spring. In Miami-Dade County, 73.6% of renters renewed their leases.
The report concluded that the U.S. rental market is “moderately competitive,” with a National Rental Competitiveness Index score of 73.4 out of 100. This is due in part to a surge in construction of both single-family homes and multifamily housing in recent years. The surge in supply has contributed to slowing rent growth in many markets.
