Miami Tops U.S. Hottest Markets, but the Midwest Heats Up the Competition

Miami Tops U.S. Hottest Markets, but the Midwest Heats Up the Competition

In 2023, the Midwest emerged as the most competitive rental market in the U.S., with three cities in the top five, driven by its affordability, ample space for remote work, and easy access to nature. But Miami still leads the nation.

Factors at play: The Rental Competitivity Index (RCI), developed by RentCafe, is used to gauge the competitiveness of rental markets, incorporating five key metrics: the duration of apartment vacancies, occupancy percentages, the number of renters vying for apartments, lease renewal rates, and the annual completion rate of new apartments. In 2023, the national average RCI was 59.5, but significantly higher in the most competitive markets.

America’s heartland: Favored by remote workers for its affordability and space, the Midwest became the hottest region in 2023. High lease renewal rates intensified competition, with the Midwest boasting 10 cities in the top 30 most competitive markets. Leading the Midwest, Milwaukee was the third most competitive nationally, with an RCI score of 113. With most of its population renting and less than 5% of apartments available, finding a rental in Milwaukee was particularly challenging, as apartments stayed on the market for only 33 days, attracting about 14 renters per unit.

Magic in Miami: While the Midwest had the highest number of competitive cities, Miami ranked as the #1 most competitive U.S. rental market with an RCI score of 122. High demand, fueled by job opportunities and no income tax, coupled with locals buying condos, strained rental supply. A 71.2% lease renewal rate led to fierce competition, with 22 applicants per vacancy, twice the national average. North Jersey followed as the second hottest market, with an RCI of 116, appealing to Millennials seeking affordability near NYC.

Small-town living: In 2023, small-town rental markets were also intensely competitive, with Fayetteville, AR, and Providence, RI, leading the charge. Fayetteville, boosted by its university and startup focus, had a 97.2% occupancy rate, and apartments were quickly occupied within 18 days, despite a 2.3% increase in housing. Providence, a popular choice for relocators, faced a severe housing shortage with no new constructions, a 96.6% occupancy rate, and apartments filling up in 35 days, attracting 17 applicants each.

➥ THE TAKEAWAY

Zooming out: The 2023 U.S. rental market saw the Midwest becoming the most competitive region, led by three top-ranking cities, in contrast to a general softening in other areas. Miami emerged as the hottest rental market due to its thriving tech scene and favorable business climate. The RentCafe report revealed a trend of increasing apartment constructions and evolving lease renewal behaviors, highlighting diverse regional rental market dynamics and trends.