Wednesday, July 17, 2024, a residential apartment building in Brooklyn Borough, New York, USA.
Yuki Iwamura | Bloomberg | Getty Images
New apartment buildings hit record highs last year, but all new supplies are clearly not enough to cool down the competition in the market. Obtaining rents actually becomes more difficult, according to a new report by apartment search site RentCafe.
According to the U.S. Census, last year, developers completed nearly 600,000 more than family units. That was the highest level since 1974, up 34% from 2023. New rental amounts in New York City, Dallas and Austin, Texas.
Nevertheless, nationwide, rent competitiveness rose at the beginning of the year, according to RentCafe’s rental competitiveness index. This is largely because more and more tenants are not moving.
Lease update rate rose to 63.1% at the beginning of the year, while leasing rate rose 61.5% at the beginning of last year, according to Rentcafe. Most of this may be due to Higher mortgage rates and higher prices in the housing market.
The occupancy rate of apartments is also 93.3%, slightly higher than early last year. In addition, the landlord offers a longer lease term, which then leads to an extended renewal period. As a result, there are an average of seven applicants per available apartment.
Locally, Miami has the highest occupancy rate. It is the most competitive person, with an average of 14 applicants per unit.
“Miami has become the ‘Wall Street South’ of ‘Wall Street South’, attracting major banking institutions and investment companies, while existing industries such as technology and healthcare continue to grow, attracting more workers,” wrote Veronica Grecu, senior creative writer and researcher at Rentcafe. “In addition, Miami’s lack of income tax and its location at the American crossroads remains a major attraction for professionals and businesses.”
However, the Midwest brings overall rental competitiveness. Ten of the 20 most popular rental markets in the region, with Chicago suburbs second only to Miami. Others include Detroit, Lansing and Grand Falls, Michigan, and Cincinnati, Ohio; Milwaukee, Wisconsin; Minneapolis-St. Paul, Minnesota.
Rents have been relaxing and are now rising again. Nationally, rents rose 0.3% in February, a six-month decline in rent increases per month, according to the apartment list. February is the beginning of a busy season in the rental market history, and rents are expected to rise throughout the summer. However, rents are still 0.4% lower than last February.
National median rents are now below their August 2022 peak, totaling 4.6%, or $67 per month, following record rental growth in 2021 and the first half of 2022, according to the apartment list. However, typical rental prices are still 20% higher than in January 2021.
“Year-year growth in rents has now been negative since June 2023, but in recent months, there have been signs that a return to positive growth is coming,” said the author of the apartment list report.
