Each landlord longs to fill their rental models rapidly. In lots of cities, discovering tenants is the least of a landlord’s issues.
In accordance with a current report from RentCafé, landlords are struggling to maintain up with demand for his or her dwellings as competitors amongst tenants for vacant models has reached new highs. Some rental markets are filling up so rapidly that builders can’t construct housing quick sufficient.
Latest headlines about dismal dwelling gross sales in South Florida have led to elevated competitors for housing amongst tenants, with Miami being RentCafé’s hottest rental market, adopted by Chicago. Nonetheless, demand for leases within the Magic Metropolis and Windy Metropolis is for totally different causes.
Why Rental Demand Is So Intense
Affordability and excessive mortgage charges
This is hardly a brand new narrative. Excessive mortgage charges have immediately influenced new homeownership and elevated the demand for leases.
This is especially true in expensive housing markets corresponding to Miami. Miami’s broad-based demand is pushed partly by its local weather, lack of Florida state earnings tax, and facilities. RentCafé knowledge confirmed that Florida was essentially the most in-demand area for condo seekers at first of the summer season transferring season.
Moreover, Miami attracted firms, startups, and prosperous tenants, inflicting flats to be stuffed in simply 32 days. There have been 19 renters for every obtainable unit, greater than twice the nationwide common. The restricted provide resulted in 71.8% of renters renewing their leases, which pushed occupancy as much as 96.5%.
Provide can’t maintain up
Each actual property market is about provide and demand, however in Chicago, which has a historical past of rezoning, holding its suburbs, corresponding to Aurora, Naperville, Joliet, and Elgin, reserved for predominantly single-family houses, discovering rental lodging right here is hard.
Thus, 60% of present tenants selected to resume their leases at first of the transferring season, leading to an occupancy charge of 95.4%. Every condo attracted 16 potential renters, filling them in a mean of 29 days.
Lease renewals are congesting turnover
Lease renewals performed a main function in fueling demand. Firstly of the 2025 leasing season, nationwide renewal charges climbed to 62.7%, up from 62% the earlier 12 months, in line with the RentCafé survey.
Revenue margin strain pushes landlords to compete for secure tenants
It’s cheaper to maintain her (and him). The price of changing a tenant, together with portray and updating an condo, advertising and marketing, and misplaced lease, might be substantial, even when a lease improve is factored in. That’s why landlords push to maintain dependable tenants.
In accordance with Zegos’ 2025 Resident Expertise Administration Report, the typical resident retention charge for multifamily corporations is 63%—the best since monitoring started in 2021. The variety of property administration companies focusing on retention charges of 70% or increased has greater than tripled previously 4 years.
Different Nationwide Rental Scorching Spots
Minneapolis, MN
The Twin Cities of Minneapolis and St. Paul don’t have sufficient housing to go round, in line with the Minnesota Realtors March 2025 Housing Market Report. Zoning laws and citizen enter (generally generally known as NIMBYs, or Not In My Yard) are being blamed.
Minneapolis is the bottom out of 128 Midwest cities in new housing improvement, in line with the MinnPost. The end result has been a rental improve from 2019 to 2025, by virtually $200 a month, with rents for unsubsidized flats now dearer than the mortgage cost on a mean single-family dwelling.
Milwaukee, WI
Dubbed “One in all America’s Most Cutthroat Rental Markets” by The Wall Road Journal, Wisconsin’s largest metropolis is experiencing excessive rental demand on account of gradual improvement.
“The dearth of recent provide is what’s making Milwaukee a scorching rental market,” Chad Venne, the true property program director on the College of Wisconsin-Milwaukee, advised the Journal.
Brooklyn, NY
NYC rents surged at first of 2025, in line with industrial actual property web site Globe St. The town’s ever-fashionable borough of Brooklyn was in excessive demand, experiencing a 1.4% year-over-year rental improve in September, in line with Residences.com.
Redfin’s Hottest Neighborhoods of 2025 noticed the ZIP code 11238, encompassing Prospect Heights and Clinton Hill in Brooklyn, earn its coveted high spot on account of year-over-year development.
“Many corporations now require staff to be within the workplace no less than two to a few days a week—so individuals are coming again. In my view, Brooklyn has develop into much more widespread than Manhattan,” stated Redfin Premier agent Ian Rubinstein within the firm’s press launch.
Rochester, NY
Condominium Advisor surveyed its record of essentially the most aggressive rental scorching spots, with Rochester, New York, popping out on high. It attracts priced-out renters from different cities and distant and hybrid staff trying to maximize their rental {dollars}. Rents elevated by 14% over the past 12 months, as town experiences a housing scarcity, with a projected 24,000 new flats wanted by 2040.
Different cities featured in Condominium Advisor’s survey of high-demand metros embody:
- Allentown-Bethlehem-Easton, PA-NJ
- Riverside-San Bernardino-Ontario, CA
- Baltimore-Columbia-Towson, MD
Last Ideas
Potential new landlords might need a tricky time discovering leases in high-demand markets corresponding to Miami and the Chicago suburbs, however tertiary markets surrounding these cities may present good alternatives.
The U.S. housing market is just not monolithic and liable to vary. Monitor new enterprise improvement (knowledge heart development is remodeling many rural areas), altering zoning legal guidelines, housing initiatives, and new transportation improvement for funding alternatives. Equally, discovering single-family leases in suburban areas inside commuting distance would possibly provide larger availability, fewer laws, and much less tenant churn than multifamily housing.
Sensible strategizing additionally performs an important function in working a worthwhile rental enterprise, and it doesn’t all the time imply jacking up rents at each alternative, as many bigger complexes do. As it may possibly price round $5,000 for a lot of landlords to switch a brand new tenant, maximizing retention is crucial.
Regardless of document development in some areas, the U.S. nonetheless has a power housing scarcity, which is fueling the housing disaster. For landlords keen to scrutinize every market and strategize effectively, continued alternatives await.