2022 will undoubtedly go down as one of the busiest years for rental markets in the US. There were more tenants in the market than ever before and as a result, competition for properties reached unprecedented levels. Miami topped the list as the country’s most sought-after rental destination as Florida properties remained a favourite for tenants.
Competition across the country
RentCafe’s annual survey on rental markets in the US found that competition ran high in almost all of them. On average, 14 tenants competed for each available apartment as the lack of supply brought a shortage of properties.
RentCafe’s Rental Competitivity Index stood at 59.9 at the end of the year in the 135 largest rental markets, indicating the challenging market for new tenants. In addition, there were 44 million Americans living in rental properties, the highest level for the last 50 years.
Rock-bottom vacancy rates
On the back of surging demand, vacancy rates plunged across the country. By the end of the year, it stood at less than 5%, with occupancy at 95.3%. In addition, two-thirds of tenants in the US renewed their rental leases in 2022 rather than moving to a new property or buying a home.
Furthermore, just 1.5% of all new-build properties entered the rental market, a figure that fell far below demand. Florida provided the exception to this trend as more new apartments came on the market in the state’s largest metros than elsewhere in the US. However, despite this uptick, demand still outpaced supply.
Busiest rental markets in the US
RentCafe ranked the 135 biggest markets across the country, allocating a score out of 130 to each. This figure is based on metrics looking at occupancy and lease renewal rates, average vacant days, demand and share of new apartments. As a result, several Florida metros ranked high in the table.
Miami most competitive
The survey revealed that Miami was the most competitive market in the country this year. This South Florida metro scored 118 out of 130, considerably ahead of its nearest competitor, Grand Rapids, with 112.6.
Miami had on average a vacancy rate of 97.5%, with properties empty for just 25 days. The metro also scored well on the lease renewal rate, which stood at 75% at the end of 2022. However, the rental market’s most competitive streak lay in the number of prospective tenants per property – in Miami, it was 32.
Orlando third most competitive
The rental market in Orlando was the third most competitive in the US, with a score of 109.3. This metro area had a vacancy rate of just 3.1% and a renewal rate of 72.5%. An average of 21 would-be tenants competed for each property in Orlando.
RentCafe attributes the busy market to Orlando’s business climate, which appeals to companies wishing to expand or relocate. The metro also belongs to the Florida High Tech Corridor, described as “a magnet for entrepreneurs, young professionals and students alike”.
Other top 3 rental markets in the US
Grand Rapids in the state of Michigan was the second busiest rental market in the US. Its occupancy rate ranked marginally higher than Orlando, although renewals stood at 69.4%. Harrisburg, the capital city of Pennsylvania, and New Jersey completed the top five, in fourth and fifth positions, respectively.