With the homeownership rate staying historically low, multifamily demand across the country remains high and rents are continuing to rise. 

Asking rent is expected to increase an average of 3.3 percent nationwide next year, which is generally consistent with 2014 numbers, according to market-research firm Reis. This figure outstrips both overall inflation, projected to be between 1.6 percent and 2 percent, and salary increases, which Mercer forecasts at 3 percent.

Despite the generally high demand, some markets reflect a possible concern of oversupply, with vacancy rates forecast to reach upwards of 7 percent. One state not feeling the crunch of a renter’s market? California, which is predicted to have not only three of the five metros with the highest asking rent increases, but three of the five metros with the lowest vacancy rates as well.

Many recent reports have predicted 2015 to be a big year for homebuyers, particularly in the first-time buyer segment, citing the growing rental unaffordability as a contributing factor. As 2015 gets underway, these metros will be ones to watch.

2015 Vacancy Rates

Top 5 Metros:
Sacramento  2.2%
Rochester  2.6%
Providence  2.8%
Ventura County  2.8%
San Bernardino/Riverside  2.8%

Bottom 5 Metros:
Charleston  7.4%
Birmingham  7.6%
District of Columbia  7.6%
Raleigh-Durham  7.8%
Memphis  8.9%

2015 Asking Rent Changes

Top 5 Metros:
San Jose  4.9%
San Francisco  4.8%
Denver  4.7%
Seattle  4.5%
Oakland-East Bay  4.5%

Bottom 5 Metros:
Westchester  2%
Fairfield County  2%
Albuquerque  2%
Little Rock  1.7%
Chattanooga  1.7%