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High Competition in the Rental Housing Market During 2024
Developers have been busy building apartment buildings this past year. According to RentCafe, more than half a million rental units should come online by the end of the year.
But another RentCafe report noted that “more rental options haven’t eased the market.” In other words, renters face challenges finding apartment homes even with the new supply.
High Renewal Rates
One reason for this trend is that more renters are deciding to stay put rather than going through the hassle of finding another apartment and moving. “This has driven lease renewal rates to 62.2% in 2024, up from 60.2% last year,” RentCafe said.
Ironically, the high competition for available apartment units is causing renters to remain. Furthermore, “those who are actively looking for an apartment need to act swiftly to secure an apartment that fits their needs,” the report said.
Meanwhile, financing and buying a single-family home are still pricey, which means potential buyers remain longer in the rental market.
RentCafe forecasts more of the same in 2025, with renters continuing to stay where they are.
It’s All About Location
As with most real estate issues, trends depend on the geography. Rental competition is high nationally. On a geographic basis, Miami was the hottest U.S. rental market in 2024. “Miami continues to attract professionals drawn to its booming tech and finance sectors, no-tax policies and strategic position as a gateway to Latin America,” the report said.
Coming in second place was suburban Chicago due to its affordability. Another attraction is the area’s number of corporate relocations and expansions. Finally, “hipsturbia continues to fuel competition throughout the areas in places like Arlington Heights, IL; Barrington, IL; Deerfield, IL; Evanston, IL; Glenview, IL; Naperville, IL; and Oak Brook, IL, keeping the overall occupancy at a high 95.4%,” according to RentCafe.
In addition:
- Louisville, KY, was the fastest-growing market for renters in 2024, followed by North Carolina’s Piedmont Triad. Limited available apartments were a challenge in both regions.
- Lehigh Valley, PA was dubbed the hottest small market for apartment hunters in 2024, again, due to limited apartment options.
