The rental market in the US saw a decline in competition from Q4 2021 to Q4 2022 according to recent findings from the Rental Competitivity Index (RCI); however, a rebound for 2023 seems to be on the horizon.
Well-known rental hotspots such as the New York borough of Manhattan, Chicago and Silicon Valley had seen an increase in demand after a pandemic dip in years prior.
The top 20 cities in the index all have occupied rates above 90% when it comes to rental properties. Manhattan was one of the few to see an increase between Q4 2021 and Q4 2022, with a 0.4 percentage point increase; Chicago and Silicon Valley increased by 0.3 percentage points; and Brooklyn by 0.7 percentage points.
All other areas in the top 20 in the index saw declines in occupied percentage of rental properties.
Competition building in the north-east rental hub is of note, with New York’s Brooklyn and Manhattan neighbourhoods, North Jersey and Boston seeing continued demand, despite being undersupplied with housing.
Outside of the occupancy rate, the report highlights that, of the top 20 in the index, only Silicon Valley and Manhattan saw an increased number of prospects per vacant property in Q4 2022, with an increase from 10 to 11.
All other areas saw a dip in numbers.
US housing in 2023
Figures released for early 2023 show, on average, US apartments filling up within 38 days, with eight prospective renters per apartment, amid an occupancy rate of 94%. With a lease renewal rate of 61% and a modest 0.43% uptick in new apartments.
The aforementioned housing shortage in areas such as North Jersey has seen its occupancy rate rise to 96.6%, taking first place in the RCI. The average occupancy rate for early 2023 stands at 94.2%
Average vacancy days for North Jersey stand at 34, compared with a national average of 38 days, according to the index. North Jersey’s average renter prospects stand at 12 per property, which is noticeably higher than the RCI’s average of eight prospects per property.
However, other areas had more competition with regard to prospects per property and a higher occupancy rate.
Miami (Dade County) saw an occupancy of 97% and an average of 20 prospective renters per property, indicating significant competition for the Florida city, with properties filling in, on average, 33 days.
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