Chicago, Silicon Valley Challenge Miami as Hottest Rental Markets

Key takeaways:

• The national competitivity score stands at 73.4 out of 100 at the start of the moving season, with nearly two-thirds of U.S. renters renewing their leases.
• Miami retains its position as the nation’s most competitive rental market, further strengthening Florida’s appeal among apartment hunters.
• Suburban Chicago has risen to become the second-most competitive rental market, influenced by the growing trend of “hipsturbia.”
• Fueled by a resurgent tech sector and significant investments in AI, Silicon Valley has skyrocketed to become the sixth hottest renting spot in the U.S.
• The supply-limited Northeast dominates the small markets ranking, with Lehigh Valley, PA, leading the charge.

 

As the summer moving season begins, finding a rental becomes increasingly difficult, which leads to unexpected shifts in the most competitive markets. And, while Miami continues its reign as the nation’s most competitive rental market, a new contender has emerged from the Midwest: Suburban Chicago has moved up to become the second-hottest market for renting, spurred by the growing popularity of hipsturbia.

This trend, which is not exactly new, has only reinforced the appeal of suburban living in the Midwest, which is known for its affordability and appealing amenities. Nevertheless, Florida remains a hotbed for apartment hunters.

Meanwhile, the Twin Cities and Memphis, TN, are witnessing significant increases in rental competition year-over-year, and New York City boroughs are also seeing a surge in demand for rental apartments. And, with its appealing college towns, Lehigh Valley, PA, has emerged as the hottest small rental market, leading a pack of nine Northeastern places with insufficient apartments for rent.

But, as the moving season ramps up demand, where else can renters look to secure apartments that fit their needs?

To find the hottest renting spots at the start of the moving season, RentCafe.com looked at 137 U.S. markets where data was available. Specifically, we used five essential metrics that determine a location’s competitive edge:

• the number of days apartments stayed vacant
• the percentage of rentals that were occupied
• the number of prospective renters competing for each vacant apartment
• the percentage of renters who renewed their leases
• the share of apartments completed this year

Then, using these metrics, we calculated a Rental Competitiveness Index (RCI) to determine how competitive the U.S. rental market currently is: At the start of the moving season, the national RCI score is 73.4, which indicates that the apartment market is moderately competitive.

More renters choose to renew their leases at the start of the moving season

Overall, the U.S. rental market is experiencing slightly less strain at the start of this moving season compared to one year prior, as it’s still feeling the effects of the influx of new apartments that have been introduced in recent years. Notably, the supply of apartments increased by 0.61% since January, which is in line with one year prior. Also, it’s worth noting that around 29% of the 137 markets analyzed are showing signs of softening, often with longer vacancy periods and more lease renewals.

More precisely, 62.4% of apartment dwellers chose to stay put at the start of the moving frenzy — most likely because they’re still unable to make the switch to homeownership. Looking back one year ago, fewer renters decided to sign lease renewals (59.7%) because they had fewer options to choose from at that time.

This marked increase in the lease renewal rate is primarily due to more and more renters getting better deals and incentives when they renew. They’re also signing longer leases, which helps property managers keep their buildings full despite so many new apartments opening in the last two years.

Naturally, it’s taking longer for vacant apartments to rent out, at an average of 46 days on the market and with only eight prospective renters per unit. (For comparison, one year ago, vacant units were occupied three days faster, and each available rental attracted nine applicants.) This year, that led to an occupancy rate of 93.3% at the start of this rental season, which is down from 94% one year prior.

Furthermore, when comparing the competitiveness of all U.S. regions at the start of the moving season, Florida stands out with an overall RCI score of 78.9, followed very closely by the Northeast (RCI score 77.1). The South and Midwest are slightly behind, with RCI scores of 75.2 and 74, respectively. Meanwhile, California and the Mid-Atlantic are neck and neck, each with an RCI score of 72.6.

Hipsturbia-driven Suburban Chicago blazes onto the charts, outpaced only by Miami’s heat

Miami holds an impressive RCI score of 94.1, making it the most competitive rental market as the moving season heats up. Apart from local renters, Miami continues to draw a steady stream of professionals attracted by job prospects across various industries, in addition to the allure of a relaxed lifestyle in the Sunshine State. And, with fewer options to choose from compared to the same time last year, this influx only intensified the competition among apartment hunters at the start of the 2024 rental season.

For example, at the onset of the 2024 moving season, a mere 3.5% of the apartments for rent in Miami were on the market for potential renters — mainly because the share of newly built apartments accounted for just 0.55% of the total housing supply at the start of the rental season, which is almost half what developers added to the market one year prior (0.97%). As a result, this had led to a staggering 73.6% of apartment dwellers choosing to sign lease renewals rather than move out. Accordingly, it currently takes 36 days for the average apartment in Miami to become occupied, with 19 eager renters competing for each available unit.

Next, Suburban Chicago is the second-most competitive rental market at the start of the 2024 moving season after making an astonishing leap from 10th place at this time last year. With an RCI score of 83.6, the Windy City’s suburbs such as Naperville, Joliet, Crystal Lake, Elgin, Northbrook, Evanston, Glenview and Schaumburg have become incredibly popular with Millennials looking for better housing options outside of Chicago amid the growing trend of hipsturbia.

 

Unlike the live/work/play movement that revitalized lackluster downtowns a decade or so ago, hipsturbia is all about the rise of lively, walkable suburbs that blend big-city perks with the affordability of suburban living. This trend is largely fueled by Millennials (and even older Gen Zers) who, as they start families, are seeking the best of both worlds.

But, as they venture to Chicago’s suburbs, these apartment hunters are faced with a high occupancy rate of 95.2%, in addition to 68.7% of current tenants choosing to renew their leases at the start of the moving season — particularly as no new units had been built recently. Thus, on average, 13 prospective renters compete for each available unit, and it typically takes 44 days to fill a vacant apartment.

Similarly, hipsturbia is alive and well in small cities scattered across northern New Jersey — such as Hoboken, Jersey City, Newark, Union City, Passaic, Mapplewood and Montclair — where renters (including Millennials) enjoy walkable downtowns, just enough entertainment and relatively easy access to New York City. As such, North Jersey emerged as the third-hottest rental market at the start of the moving season, with an RCI score of 82.3.

That said, finding a rental in North Jersey remains a challenge for many apartment hunters. In particular, the recent 0.60% increase in the local housing supply hardly meets the demand for apartments, as highlighted by the 96% occupancy rate — one of the highest in the country. This challenge is heightened by a substantial 71.7% lease renewal rate at the beginning of this rental season. Vacant apartments get snatched up within 43 days, and each available unit draws in 13 prospective renters, on average.

In the same urban-meets-suburban vibe, smaller cities around Philly emerged as highly south-after renting spots at the start of the moving season, placing Suburban Philadelphia in 10th place in our ranking with an RCI score of 78.4. Here, places like Ardmore, Bryn Mawr, King of Prussia, and Newtown Square, as well as quaint boroughs a bit further out — like Phoenixville, Doylestown and West Chester — provide more affordable housing options compared to the city, while still being close to Philadelphia.

Furthermore, the share of newly built apartments in Suburban Philadelphia represents a mere 0.08% of all rentals in the area, which is clearly not enough to keep up with demand. With that, 76.3% of existing renters chose to renew their leases as the start of the moving season, pushing the occupancy rate to 94.4%.

Not to be outdone, Brooklyn, NY, (where hipsturbia was born) secured the 14th spot among the nation’s hottest rental markets at the start of the moving season. With less than 4% of the existing rentals available for prospective tenants (despite a 0.69% uptick in recently built units), apartments in Brooklyn are hard to come by — so much so that considerably more renters chose to stay put: Namely, 69.9% remained in place at the start of this moving season, up 8.4% since one year prior and a clear sign that Brooklyn is a trending renting spot.

Twin Cities, Memphis, NYC boroughs emerge as trending rental markets, getting significantly hotter since last year

Several metros in our analysis have experienced significant increases in their RCI scores year-over-year. Namely, the twin cities of Minneapolis and St. Paul, MN, are at the forefront, with a significant 9.2-point increase to bring their RCI score to 65.6. This was largely driven by more renters signing lease renewals at the beginning of the current rental season. In fact, Minneapolis consistently topped our Rental Activity Reports for several months in a row until just recently, as listings here have been getting a lot of attention and engagement from apartment hunters perusing on RentCafe.com.

Next up is Memphis, TN (the 26th hottest rental market), although it didn't break the top 20. Here, too, more renters renewed their leases (63.4%, up 6.1% compared to the same time last year) as the moving rush started to unfold after no new apartments were opened recently.

 

Queens, NY, also surged as a trending spot for renting this season. With very limited options to choose from, almost two-thirds of those already renting apartments in Queens renewed their leases — up 14.8% compared to one year prior for the highest increase in this metric among all markets analyzed.

Meanwhile, Manhattan’s RCI score gained 5.2 points from one year ago to reach 73.3 this rental season, in line with the national benchmark. This surge was also driven by a boost in its lease renewal rates amid virtually no new apartments opened recently. At the same time, Brooklyn’s RCI score grew by only 1.5 points year-over-year to reach 77.5. With these three iconic boroughs getting hotter than they were one year prior, New York City is clearly becoming more competitive and regaining its allure among renters.

Florida remains competitive amid insufficient apartments and more renters renewing their leases

Besides Miami, several rental markets in Florida also remain highly competitive. Due to a limited supply of apartments and strong renter demand, these cities are fueled by booming economies and an appealing lifestyle for both locals and newcomers.

To that end, Orlando emerged as the second-hottest rental market in Florida and seventh in the U.S. at the start of the moving season. Orlando’s population is booming: It’s expected to grow by about 1,500 new residents every week until 2030, which obviously keeps the demand for apartments high.

However, rapid growth is also straining the metro’s housing supply. Plus, the occupancy rate is a high 94.6% and newly built rentals (accounting for 0.99% of all apartments for rent in Orlando) are not enough to keep up with demand. As a result, more than two-thirds (67.8%) of apartment dwellers here chose to stay put, up 1.2% compared to one year prior. This has led to 11 prospective renters competing for each vacant unit, which is filled within 39 days, on average.

By comparison, vacant apartments in Broward County (#15, with an RCI score of 77.3) stay on the market a few days longer, at an average of 43 days, likely due to a 1.21% uptick in the supply of housing — second only to Jacksonville (ranked #60), where units represent 1.68% of all apartments in the metro. Yet, competition remains intense in Broward County, with 13 applicants per available unit amid a tight occupancy rate of 95.1%.

Additionally, 67.3% of current renters in Broward County opted to renew their leases at the start of the moving season rather than search for a new place. It’s also notable that a surge of new luxury developments has hit coastal cities — like Fort Lauderdale, Pompano Beach, and Hollywood — within Broward County. Despite being high-end, these new apartments continue to draw affluent renters, mostly from the northern U.S.

At the same time, Tampa claims 19th place in our ranking, with an above-average RCI score of 76.1. The metro’s growing population, particularly Millennials attracted by job prospects and lifestyle, continues to drive high demand. Additionally, Tampa's thriving tourism industry fuels a strong demand for short-term vacation rentals.

But, althought new apartments make up 0.65% of the local housing supply, the challenge of moving only to find apartments out of budget is prompting many current renters to secure their housing. Consequently, 65.4% of Tampa renters renewed their leases at the start of this moving season, which is up 1.9% since one year prior — the highest uptick in lease renewals in all of Florida.

Affordable living, desirable amenities keep Midwestern markets in high demand this rental season

The rise of remote work continues to drive demand for larger living spaces in previously low-cost areas like the Midwest. However, even with more affordable options, the limited inventory can't keep up with the surge in demand for apartments. For this reason, renting in various places in the Midwest has become increasingly challenging at the outset of the 2024 moving season.

In addition to Suburban Chicago, Grand Rapids, MI, has emerged as a highly competitive rental market, ranking fourth nationwide (RCI score 82.2). The metro’s diverse economy, fueled by healthcare, manufacturing, technology and other industries, is attracting many professionals who often rent initially.

But, with less than 5% of apartments available for renting and virtually no new units added to the market recently, almost 71% of those already here signed lease renewals. Therefore, apartments in Grand Rapids typically remain vacant for 43 days with available units attracting nine applicants at the start of this moving season.

With an RCI score of 81.2, Milwaukee is close behind, ranking third in the Midwest and fifth nationwide. The metro’s robust economy; attractive amenities, such as walkable neighborhoods; entertainment options; and overall quality of life are key attractions for renters looking for housing options that match their budget.

However, the high occupancy rate of 95.1% indicates that there are not enough apartments in Milwaukee to meet the increasing demand, and newly built units represent just 0.14% of the local inventory. As such, this limited supply makes the market highly competitive, with 13 prospective renters vying for each available unit — the highest in the Midwest, matched only by Suburban Chicago. Under these tight circumstances, almost 70% of apartment dwellers renewed their leases at the kickstart of the rental season, which is a significant 1.2% increase year-over-year.

The trend of rising lease renewal rates in the Midwest is also evident in places like Kansas City, MO (ranked #13 with an RCI score of 77.6); Omaha, NE (ranked #20 with an RCI score of 75.7); Chicago (ranked #27); Columbus, OH (ranked #38); Indianapolis (ranked #39); Northeast Ohio (ranked #41); and the Suburban Twin Cities.

Tech revival propels Silicon Valley to hottest rental market in California, with Orange County, Eastern LA in the Top 10

Those looking for apartments for rent in California are up against tough competition and a limited number of new options due to a long-running housing shortage. In this case, Orange County and San Diego vye for the title of the most competitive rental market in the Golden State. Even so, in a surprising turn at the beginning of this rental season, Silicon Valley emerged as the hottest renting spot in California and sixth in the U.S., up from 21st place just a year ago.

This remarkable surge has been largely driven by a rebound in the tech sector, which faced economic challenges and layoffs in 2022-2023. Currently, venture capital firms are heavily investing in emerging technologies like AI, cybersecurity, fintech, healthcare tech, climate tech, and quantum computing. And, many of these firms and their start-ups are based in Silicon Valley, further adding to its appeal as a top rental destination (RCI score 80.8).

So, with an occupancy rate of 95.1% and no new units recently introduced, options are scarce, causing vacant apartments in places like Palo Alto, Cupertino, Mountain View, Menlo Park, Sunnyvale and San Jose to remain on the market for an average of 40 days as each available unit attracts 12 prospective renters. What's more, the area’s soaring appeal is also evident in the surge in lease renewals: The rate jumped 8.4 percentage points from last year to 54.1% at the start of the 2024 rental season.

California’s second-hottest rental market, Orange County, holds the #8 spot nationwide with an RCI score of 78.8. Here, again, the high demand for rentals — coupled with limited choices of apartments despite the 0.38% uptick in supply — continues to fuel fierce competition. Plus, 63.4% of those already renting apartments in Orange County decided not to move at the start of the moving season (up 4% from one year prior), thereby keeping the occupancy rate at nearly 96%.

Nearby, Eastern Los Angeles County has seen the largest year-over-year jump in rental competitiveness, soaring from 25th place to break the top 20 at the start of this rental season and claim the ninth position. This dramatic rise is primarily due to a sharp increase in lease renewals (from 42.1% to 52.7%) which has left limited options available for apartment hunters in the area.

Notably, the increased competition for apartments in Eastern Los Angeles County is largely due to the spillover effect from central Los Angeles. As the moving season began, many renters found themselves priced out of the central apartment market, which then prompted them to look east for more affordable options within a reasonable commuting distance.

The Northeast dominates America’s small rental markets ranking, Lehigh Valley takes the lead

The Northeast scored nine spots in the top 20 most competitive small rental markets, to reinforce its reputation as a prime location for apartment seekers this moving season. It was followed by the Midwest and South. Many people are moving from other parts of the country — including pricey coastal cities — in search of more affordable apartments in suburban-like places up north.

Specifically, Lehigh Valley, PA, is the hottest small rental market in the U.S. Its impressive RCI score of 89.6 surged by 7.3 points compared to one year ago, highlighting its appeal for renting. The college towns of Allentown, Bethlehem, and Easton are particularly popular, further contributing to Lehigh Valley’s appeal.

It's worth noting that the competition for apartments in Lehigh Valley became so fierce that securing an apartment here was like finding the needle in the haystack as the rental season started to unfold: With newly opened units only accounting for 0.15% of rental apartments in the metro, 82.1% of renters chose not to move —the highest lease renewal rate among all markets analyzed. This then pushed the occupancy rate to a tight 95.8%.

Madison, WI, ranks as the second-most competitive small rental market and stands out as a central part of the Midwest's Silicon Prairie. In particular, the metro’s tech sector is booming, thanks largely to the University of Wisconsin and a community that actively supports startups and tech innovation. Consequently, Madison is attracting tech companies and skilled professionals who are seeking opportunities beyond the traditional tech hubs on the coasts.

However, despite the recent addition of apartments — which make up 0.83% of all rentals in the area — there still aren't enough available rentals. This high demand means that apartments are snatched up quickly, typically within just 36 days, and each available unit attracts 16 prospective renters. So, with less than 4% of apartments in Madison vacant at the start of the moving season, 70% of those already renting here renewed, which was up 9.5 percentage points from one year prior. Accordingly, this marked increase in lease renewals was a key factor in setting Madison apart from Fayetteville, AR, and Providence, RI, which boast the same RCI score of 87.6.

Securing third place, Fayetteville shines as a center for higher education and commerce, supported by major employers such as Walmart, Tyson Foods, J.B. Hunt, and the University of Arkansas. Yet, despite recently built units representing 0.66% of the total inventory, there are still not enough apartments for rent in Fayetteville, either, prompting almost 75% of renters to renew their leases at the start of the moving season. As a result, vacant units are quickly secured, often disappearing from the market in a little more than three weeks. More precisely, rentals are off-market within 24 days — the fastest in the U.S.

On the East Coast, Providence, RI — the fourth-hottest small market — is a magnet for students, young professionals, and families due to its universities, growing job market, and cultural attractions. But, with zero apartments built recently, the supply of rental units hasn't kept pace with the growing demand. There are also 16 applicants vying for each vacant apartment — only matched by Madison at #2 and another Northeastern market, Worcester-Springfield, MA (ranked #9) — as 66.9% of renters signed lease renewals. What's more, Providence’s RCI score has risen by 8.9 points compared to one year prior, indicating that the market has become hotter.

Small rental markets along the Sun Belt experience significant growth in competitiveness since last year

Speaking of rising RCI scores among small markets, Palm Beach County, FL (ranked #8) experienced the biggest jump of 14 points to bring its current RCI score to 85.5. This is mainly due to a significant surge in lease renewals — 69.6% at the start of the moving season, up from 59.5% one year prior.

Similarly, the apartment market in Southwest Louisiana (comprising places like Lake Charles, Port Allen, and Calcasieu County) has also heated up. Here, the lease renewal rate climbed from 58.1% to 67.1%, mainly because no new apartments were opened in the area recently. This increase also raised Southwest Louisiana's RCI score to 77, marking a 12.3-point rise since the start of the 2023 rental season.

 

 

Following very closely is White Plains, NY, with a 12.1-point increase to a current RCI score of 79.7. White Plains is conveniently located close to New York City, making it an attractive option for commuters seeking a more suburban lifestyle while still remaining close to job opportunities and the Big Apple’s attractions.

Other small markets in the Northeast that have become hotter at the start of this rental season are Harrisburg, PA (#7);Albany, NY (#15); Buffalo, NY (#14); Portland, ME (#17); and Rochester, NY (#20).

Browse the maps below to see the rental competitivity in other regions at the start of the 2024 moving season:

 

Methodology

To compile this report, RentCafe.com’s research team analyzed Yardi Systems apartment data across 137 rental markets in the U.S. The data comes directly from market-rate large-scale multifamily properties of at least 50 units. Fully affordable multifamily properties were excluded.

The markets were ranked based on a market competitive score. To calculate each market’s score, we ranked them according to five metrics and their averages for January through March 2024: apartment occupancy rate; average total days vacant; prospective renters per vacant unit; renewal lease rate and share of new apartments completed during the same timeframe.

We then compiled an average ranking by assigning a percentage weight for each metric: 30% for apartment occupancy rate; 15% for average vacant days; 15% for prospective renters per vacant unit; 30% for renewal lease rate; and 10% for the share of new apartments.

In this study, the terms “market,” “area,” “metro,” and “location” are used interchangeably and are as defined by Yardi Matrix markets.

Fair use and redistribution

We encourage you and freely grant you permission to reuse, host, or repost the research, graphics, and images presented in this article. When doing so, we ask that you credit our research by linking to RentCafe.com or this page, so that your readers can learn more about this project, the research behind it and its methodology. For more in-depth, customized data, please contact us at  media@rentcafe.com.