Brooklyn is one of the most competitive rental markets in the US, a new report says

Although most of the U.S. population lives in a property they own, the share of Americans renting their homes has gone up in recent years. The number of renter households increased by 870,000 between 2020 and 2021, reaching a total of 44 million. This jump in demand combined with high mortgage costs and a slowdown in apartment construction has made it more difficult to find a rental unit. 

In a recent report, RentCafe, a countrywide apartment listing service, analyzed the 134 largest markets in the U.S. The company used the following metrics: the number of days apartments were vacant, the occupancy rates, the number of renters competing for an apartment, the percentage of renters who renewed leases, and the share of newly completed apartments. 

Brooklyn, NY, was named one of the most competitive rental markets in the country. Since the start of the COVID-19 pandemic, this borough has become increasingly popular among renters. Brooklyn neighborhoods saw more interest from remote workers who no longer had to commute to Manhattan and were searching for more space. The average apartment in Brooklyn received applications from 9 renters and stayed on the market for 43 days. 

In the fourth quarter of 2022, an average rental unit in the United States found new tenants within 38 days, up from 32 days at the start of 2022. Approximately eight prospective renters were competing for the same vacant apartment, down from 11 last year. In the final three months of 2022, more than 60 percent of tenants renewed their leases, and the occupancy rate reached 94.2 percent. 

“A combination of factors including rapid inflation, interest rate hikes, high home prices, and increased costs of living are pushing many renters to reconsider their housing options,” Veronica Grecu, a senior creative writer and researcher for RentCafe, wrote. “So, as the new year unfolded, many were seeking better living situations within their budgets.”

RentCafe named North Jersey, which includes Jersey City and Newark, the most competitive rental market in the nation. These cities attract renters thanks to their proximity to New York City and relatively affordable rents. The low supply of new housing and influx of newcomers pushed 12 tenants to compete for the same apartment in this area. Over 72 percent of tenants renewed their leases, and the occupancy rate rose to 96.6 percent. 

“Aspiring homebuyers continue to rent in North Jersey while enjoying a relatively affordable cost of living for the tri-state area,” the report reads. “This allows renters to save for down payments until the housing market cools down enough that they can fulfill their dream of owning a home.”

Resources:

“America’s Hottest Rental Markets at the Start of 2023: North Jersey Overtakes Miami as Competition Builds Up in the Northeast,” by Veronica Grecu (RentCafe, 2023)

“Miami ranks as nation’s second most competitive rental market,” by Holden Walter-Warner (The Real Deal, 2023)

“AMERICA’S RENTAL HOUSING 2022,”(Center for Housing Studies of Harvard University, 2022)