2023 Year-End Report: Miami Tops U.S. Hottest Rental Markets, but the Midwest Heats Up the Competition

The Midwest was the most competitive region for renting in 2023 with three of its markets making the top five nationwide. While most of the U.S. shows signs of softening in rental competitiveness, Midwestern markets are bucking the trend. Specifically, the region’s lower cost of living, ample living spaces that bode well with remote work, and almost instant access to the great outdoors are attracting more and more renters.

In fact, the Midwest is experiencing an economic revival, fueled in part by the Rise of the Rest fund that aims to boost entrepreneurship and innovation outside of the coastal hubs. To that end, America’s heartland has seen thousands of startups emerging in recent years, showing its both potential and vitality.

On the other hand, Miami was the nation’s hottest rental market in 2023. The metro’s thriving tech scene continues to attract innovators and entrepreneurs from all around the world, driving the competition for rental apartments. Plus, its business-friendly climate offers incentives and opportunities for growth, while the lack of income tax makes it a top renting spot for both locals and newcomers.

Of course, many people were looking for a new place to call home throughout this year, especially during the moving frenzy in the peak rental season. Some sought to enjoy the amenities and opportunities of urban living in places like North Jersey or Milwaukee, while others chose more laid-back locations like Fayetteville, AR, or Providence, RI.

So, as the year draws to a close, what were the hottest rental markets in 2023? To find out, RentCafe.com analyzed the 139 largest markets in the U.S. where data was available and ranked them based on five key metrics when it comes to rental competitiveness. These metrics were:

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

We then used these metrics to calculate a Rental Competitivity Index (RCI) to see how competitive the U.S. rental market was this year. The national RCI score was 59.5 in 2023.

With a surge of new apartments in the market, fewer renters renew leases this year

As 2023 comes to an end, it’s evident that the U.S. rental market has been shaken by the flood of new apartments opened in the last few years, as well as the lingering economic turmoil — so much so that all metrics used in this competitivity report have been affected.

First, vacant apartments stayed on the market for 38 days, on average, with nine prospective renters competing for each available unit. That’s almost one week longer than last year (32 days) when as many as 14 apartment seekers were competing for the same available unit.

Meanwhile, about 94% of the rental apartments nationwide were occupied, which was significantly below the 95.3% occupancy rate at the end of 2022. That’s mainly because renters had more apartments to choose from this year as 1.89% of the available rental units have been built since January. By comparison, in 2022, the share of newly built apartments represented just 1.5% of the available units during that year.

Furthermore, as new apartments surged this year, many renters chose to move out rather than renew their leases. More precisely, 60.2% of renters decided to stay put in 2023 as opposed to the 62.7% of renters who renewed their leases at the end of 2022.

Additionally, in at least four of the five relevant metrics for competitivity, 86% of the 139 rental markets analyzed became more relaxed in 2023 than they were last year. Notably, most of these markets experienced a drop in their shares of lease renewals and a marked increase in the number of days it took for apartments to be filled.

At the same time, undersupplied locations where no new apartments were built in 2023 (mostly small markets with outdated inventory, like Providence, RI, and Little Rock, AR) saw fierce competition among renters throughout the entire year.

Miami leads the nation with North Jersey on its heels

With an RCI score of 122, Miami was the hottest rental market in the U.S. in 2023, fueled once again by sky-high occupancy and lease renewal rates amid a veritable building frenzy. Despite thousands upon thousands of new apartments being added to the market throughout the last few years, the metro continues to welcome new residents seeking better job opportunities and a tax-free lifestyle. Likewise, many wealthy domestic buyers purchased condos for themselves rather than renting them out, which only dwindled the number of apartments available for prospective renters this year.

Although the number of apartments for rent in Miami has grown by a healthy 3.7% since January, the newly built units were still not enough to meet the demand for rentals this year. On top of that, 71.2% of renters choose to stay put, meaning apartment seekers had a very hard time securing an available unit in 2023. That’s why there were 22 applicants fighting for each vacant rental (more than double the national average), with apartments being taken off the market quickly, often within one month.

Fueled by a mix of high home prices and insufficient supply — sprinkled among inflation concerns and above-average property taxes — North Jersey was America’s second hottest rental market in 2023 with an RCI score of 116. It was also the only Northeastern market to score above 100 points in our current ranking. In fact, the metro has become a hot spot for renting throughout the pandemic, attracting many Millennials looking for more affordable housing options outside of major rental hubs like New York City: It ranked fifth in terms of rental competitiveness at the end of 2022 and then swiftly moved to first place at the start of 2023.

With an occupancy rate of 96.3% (the second highest in the country) and 70.5% of apartment dwellers choosing to stay put, prospective renters in North Jersey counties (like Bergen, Essex, Hudson, Morris, Passaic, Sussex and Union) faced fierce competition this year. Even with a 1.98% uptick in new apartments, renters had very limited options to choose from, leading to one of the toughest rental markets in the U.S. Consequently, it took 34 days, on average, for vacant apartments to become occupied in 2023 as 14 prospective renters competed for the same units.

The Midwest dominates the rental market competition in 2023

Riding the remote work trend, many renters seeking more bang for their buck are choosing to relocate to the Midwest, where they can enjoy more space and a relatively affordable cost of living. In addition, more than two-thirds of apartment dwellers renewed their leases in almost all Midwestern locations, which only intensified the competition for rental apartments in the region.

As a result, the Midwest emerged as the hottest region for renting in 2023: It boasted 10 entries in our ranking of the top 30 most competitive markets, including four that earned RCI scores above 100.

The nation’s third-hottest rental market this year — and leading in the Midwest — was Milwaukee (RCI score 113), where more than half of the population rents, according to the U.S. Census Bureau. With less than 5% of its apartments available at any given time and a staggering 69.6% of the current renters choosing to stay put, those looking for rental apartments in Milwaukee found themselves in a tight spot in 2023. Even though the local supply of housing has grown by 2.91% since January, the demand is so high that most apartments only stay on the market for 33 days, with 14 renters competing for each available unit.

Similarly, a steady influx of students and remote workers moving from larger cities in search of affordable living and better career opportunities — particularly in the expanding health care sector — pushed Grand Rapids, MI, to fourth place in our ranking (RCI score 109). But, both newcomers and local renters were faced with very limited availabilities this year as nearly 70% of apartment dwellers chose to renew their leases instead of moving or making the leap to homeownership.

Consequently, this has pushed the occupancy rate to a very high 95.5%, even with a 1.04% increase in the existing supply. As such, there were 10 applicants for each vacant apartment, which was occupied within 34 days, on average.

Another highly sought-after renting spot in the Midwest and in the U.S. overall was Omaha, NE (RCI score 107), which claimed sixth place in our ranking. Offering a great balance between space, cost of living and career opportunities, Omaha has been attracting more and more attention from newcomers in recent years. However, insufficient supply makes it a real challenge to secure a rental here.

Add to that the fact that almost 64% of those already renting in Omaha extended their leases this year, and the vacancy rate rose to a high 96%. Therefore, with not enough options to choose from (despite the healthy 2.71% increase in new apartments) vacant apartments in Omaha were going like hotcakes, often within 28 days — the fastest in the country. Moreover, each vacant apartment attracted 13 applicants.

New apartments galore, yet the Northeast remains a tough market for renters

With its many universities, diversified economy and high employment rates in pricey metro areas like New York, Boston and Philadelphia, the Northeast attracts a large number of people. This includes younger generations that are seeking housing options that better fit their budgets while still enjoying big-city amenities.

For example, renting in Suburban Philadelphia has become more financially attractive since the pandemic — largely due to remote work and the appeal of more space — making the area more and more competitive. Thus, in 2023, Suburban Philadelphia emerged as the second-hottest rental market in the Northeast and the eighth-hottest in the U.S. with an RCI score of 99.

However, this seriously undersupplied area has seen very few apartments opened recently, prompting more than three-quarters of current apartment dwellers to extend their leases and pushing the overall occupancy rate to 94.7% this year. On average, it took 41 days for vacant apartments to be filled in counties like Berks, Bucks, Chester, Delaware and Montgomery in Pennsylvania; Kent and Newcastle in Delaware; Cecil, MD; or Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester and Salem in New Jersey. What's more, there were 11 prospective renters vying for each available unit.

Of course, despite a marked increase in new apartments, finding an apartment for rent in Brooklyn, NY (#9 with an RCI score of 98) was anything but easy — sometimes not even for deep-pocketed renters moving in from across the East River. Plus, faced with insufficient supply amid above-average mortgage rates, many aspiring homebuyers prefer to keep renting, thereby adding pressure to an already tight rental market.

That said, 64.6% of those already living in rental apartments in Brooklyn chose to renew their leases in 2023, driving the borough’s occupancy rate to 96.1%. On average, vacant apartments stayed on the market for 38 days here, and nine applicants competed for each available unit.

Manhattan, on the other hand, only made it to 22nd place among the nation's 30 hottest rental markets in 2023. One possible reason is that Manhattan has more upscale properties than Brooklyn, which can deter renters who are looking for better options, by making the market less competitive.

Orange County shines brightest in SoCal, but apartments rent faster in Silicon Valley

On the opposite coast, new apartment construction has not kept pace with the growing demand for rental housing in Orange County, making it the hottest rental market in all of California. Claiming 15th place nationwide, the OC’s strong economy and a variety of job opportunities make it a popular destination for a broad range of workers. Still, without enough housing to go around, it can be difficult for renters to find a new place to call home in the area.

That said, 60.5% of renters in Orange County renewed their leases instead of moving this year, keeping the occupancy rate at a tight 95.9%. There were also 13 prospective renters competing for each vacant unit, and it took 40 days for apartments to be filled, on average.

Hot on the heels of the OC was its long-time contender, San Diego, where only half of the current renters extended their leases. Boasting almost similar occupancy rates and very few newly built units, available rental apartments in San Diego flew off the market in a little more than one month, with 14 applicants competing for each unit in 2023.

Up in Northern California, available apartments in Silicon Valley rented as quickly as 33 days — the fastest in the Golden State — albeit with more options to choose from after a 1.71% increase in supply. Plus, with lease renewals significantly below the national average (at 47.9%, to be exact) and an occupancy rate of 95.5%, each vacant apartment in Silicon Valley attracted 12 prospective renters.

In the wake of the Great Tech Layoff Tsunami that hit Silicon Valley in the last year, many techies have joined early-stage start-ups, bringing their skills and experience to the new ventures emerging here. Accordingly, this kept the rental market moderately competitive in this corner of California, which includes places like Mountain View, Menlo Park, Palo Alto, Sunnyvale, Cupertino, Santa Clara, Redwood City, Milpitas and San Jose.

Otherwise, the list of large rental markets that were competitive in 2023 also includes Broward County, FL; Chicago and Suburban Chicago; Central Jersey; Orlando, FL; Bridgeport-New Haven, CT; Cincinnati; Kansas City, KS; Greater Boston; Southwest Florida; Lansing-Ann Arbor, MI; Pittsburgh; Eastern Virginia; Tampa, FL; Baltimore; Detroit; Eastern Los Angeles County; California's Central Valley; and the suburbs surrounding the Twin Cities of Minneapolis and St. Paul, MN.

Apartments renting in 18 days in Fayetteville, the hottest small rental market

While large urban metros may be appealing to many renters, small-town living still has its charm for those seeking better housing options within their budget. However, finding a rental apartment in small-sized markets was not easy this year for either newcomers or existing renters, especially in places with high demand from students looking for off-campus housing near their schools. In fact, the nation’s top three hottest small rental markets scored the maximum number of points for competitivity, which was 126.

Fayetteville, AR, emerged as the most competitive rental small rental market in 2023. Its economy is bolstered by the presence of the University of Arkansas, and also by the growing Northwest Arkansas region. Additionally, the city has been working toward branding itself as the Startup City of the South by focusing on retaining talent, developing green jobs and fostering a sustainable business climate. But, with an astronomical occupancy rate of 97.2% and more than three-quarters of the current renters renewing their leases, finding an available apartment in Fayetteville this year was like finding a needle in a haystack.

Moreover, the demand for housing in Fayetteville was so incredibly high that most apartments were occupied in just 18 days (the fastest in the nation), with an average of 18 prospective renters competing for each available unit. Even the 2.3% increase in the number of apartments was not enough to quench renters’ thirst for housing this year.

In the same way, Providence, RI, was the second hottest small rental market in 2023. This severely undersupplied college town is also a top relocation spot for new residents coming from nearby Hartford, CT, as well as large cities like Boston, New York and San Francisco.

Yet, with zero apartments built recently, both newcomers and those already living in rental apartments in Providence faced fierce competition this year. On top of that, almost 68% of apartment dwellers in Providence renewed their leases, driving the occupancy rate to a high of 96.6%. On average, vacant apartments here were occupied within 35 days, and there were 17 prospective renters vying for each available unit.

Also boasting the maximum RCI score was Harrisburg, PA, the third-most-competitive small rental market in 2023. Thanks to its central location within Pennsylvania, rental apartments in Harrisburg are within a three-hour drive of several major cities like Philadelphia; Baltimore; Washington, DC; Pittsburgh, PA: and New York. What's more, the presence of state government offices makes Harrisburg a hub for public sector jobs in the state.

But, like many other small rental markets across the country, Harrisburg saw very few units built recently, which only made things more difficult for apartment seekers this year. And, with less than 4% of the existing units available, 75.7% of those already renting here chose to renew their leases. That led to 14 prospective renters competing for each vacant unit, which stayed on the market for an average of 35 days.

Besides Fayetteville, only six other small renting spots added to their supplies of housing this year, most of which were located in the Midwest. For example, the number of apartments in Rochester, MN, grew by 3.1%, while the rental market in South Dakota saw a 3.9% uptick in its housing supply, which led to fewer renters renewing their leases. Conversely, despite the 2.8% increase in the supply of apartments, nearly 80% of the apartment dwellers in Lehigh Valley, PA, chose to stay put, rather than risk the competitive search for a new rental.​

Other small rental markets that were competitive in 2023 included Portland, ME; Knoxville, TN; Madison, WI; Asheville, NC; Tulsa, OK; Little Rock, AR; Wichita, KS; Lafayette, IN; Albany, NY; Rochester, NY; Buffalo, NY; Youngstown, OH; Fort Wayne, IN; El Paso, TX; Fayetteville, NC; North Dakota; South Bend, IN; Worcester-Springfield, MA; Palm Beach County, FL; White Plains, NY; Toledo, OH; and Chattanooga, TN.

Browse the maps below to see other regions' rental competitiveness in 2023:

Methodology

RentCafe.com is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the U.S.

To compile this report, RentCafe.com’s research team analyzed Yardi Systems apartment data across 139 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 September 2023: 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 compared to the overall supply at the end of December 2022.

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”, “location” and “place” were used interchangeably and are defined as Yardi Matrix markets.

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