North Jersey has surpassed Miami as the hottest rental market in the U.S., according to RentCafe’s Rental Competitivity Report for the start of 2023.
RentCafe analyzed the nation’s 134 largest markets at the start of the year where data was available, looking at five metrics that impact a location’s competitivity, including the number of days apartments were vacant; the percentage of rentals that were occupied; the number of prospective renters who competed for an apartment; the percentage of renters who renewed their leases; and the share of new apartment completions. Based on these metrics, the national Rental Competitivity Index (RCI) score was 60 out of 126 at the beginning of 2023.
On the national level, amid an occupancy rate of 94.2%, the average renter had to compete with seven other people to secure a vacant apartment, which filled up within 38 days. At the same time, lease renewals were at 60.7% and the number of newly opened apartments only accounted for 0.43% of the nation’s housing supply.
North Jersey, which encompasses Jersey City and Newark, had an RCI score almost twice the national average—115. According to RentCafe, the severe shortage of housing and an influx of affluent renters pushed the occupancy rate to 96.6%. In the metro area, the average apartment was occupied within 38 days, with 12 renters competing for it.
Miami ranked second. This is attributed to an occupancy rate of 97% and 70% of renters renewing their leases. As many as 20 prospective renters competed for a vacant apartment in the metro, with rental units being filled within 33 days.
According to RentCafe, eight out of the nation’s 20 most competitive rental markets were in the Northeast. Newcomers to the top 20 included Boston and Brooklyn, New York, which both saw demand increase toward the end of last year. The markets saw modest increases of between 0.3% and 0.5% in new apartments and about two-thirds of renters renewing their leases amid occupancy rates above 95%.
Large rental hubs, where demand is strong but supply is insufficient, also had seen some of the biggest year-over-year increases in competitivity. This includes Silicon Valley, western Los Angeles, and suburban Chicago, which had an average of 10 to 12 prospective renters competing for each vacant apartment. In addition, in Manhattan, Chicago, and Washington, D.C., competition was tight, with approximately 55% to 65% of renters renewing their leases and no new units being built recently.