The most competitive rental markets in the country are failing to add enough new housing.
That’s according to a new analysis of the country’s 139 largest rental markets by RentCafe, which found that 17 of the 20 most competitive rental markets in the US are building less than the national average. Four of these markets — Oklahoma City, the Bridgeport-New Haven area in Connecticut, the Lansing-Ann Arbor, Michigan area, and Silicon Valley, California — added virtually no new apartments at the beginning of 2024.
The average share of newly constructed apartments in rental markets across the country is 0.67%. Brooklyn, New York, had just 0.19% at the start of 2024, San Diego had just 0.24%, and North New Jersey had just 0.51%, RentCafe found.
The report determined market competitiveness using five factors, including the percentage of apartments occupied by tenants, the number of days it takes to fill an apartment, and the share of newly constructed units.
The biggest change over the last year in most markets was a rise in the number of days a typical apartment sits unoccupied in between tenants — jumping from 38 days in early 2023 to 41 days in early 2024, RentCafe found.
Overall, rent growth in markets across the country has slowed a bit over the last year, in large part because cities across the country have seen a glut of newly-built apartments hit the market. But new supply is drying up as construction slows amid elevated interest rates, high construction costs, expensive insurance premiums, and flattening rents.
Low-income renters are the hardest hit. No state in the country has sufficient affordable housing — there are fewer than four affordable apartments available for every 10 very low-income tenants, the National Low Income Housing Coalition reported recently.
Miami has the most competitive rental housing market in the country, the report found. More Miami renters — 14 — compete for a single apartment, on average, than anywhere else in the country. Just 3.5% of Miami’s rental apartments were vacant early this year — far below the five to eight percent vacancy rate that’s considered healthy.
Meanwhile, the Midwest has become the most competitive region in the country over the last year, as people move to the region in part for slightly more affordable homes. Seven midwestern cities are among the top 20 most competitive markets in the US. Milwaukee is now the second-hottest market in the US after Miami and ahead of North Jersey and suburban Chicago.
College towns — led by Fayetteville, where the University of Arkansas is attracting a growing student body — are also feeling the crunch.
