Each landlord longs to fill their rental models shortly. In lots of cities, discovering tenants is the least of a landlord’s issues.
In line 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 shortly that builders can’t construct housing quick sufficient.
Current 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 instantly influenced new homeownership and elevated the demand for leases.
This is especially true in dear housing markets reminiscent of Miami. Miami’s broad-based demand is pushed partly by its local weather, lack of Florida state revenue tax, and facilities. RentCafé knowledge confirmed that Florida was probably the most in-demand area for condominium seekers at the beginning of the summer season transferring season.
Moreover, Miami attracted firms, startups, and prosperous tenants, inflicting flats to be crammed in simply 32 days. There have been 19 renters for every accessible 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 preserve up
Each actual property market is about provide and demand, however in Chicago, which has a historical past of rezoning, preserving its suburbs, reminiscent of 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 the beginning of the transferring season, leading to an occupancy fee of 95.4%. Every condominium attracted 16 potential renters, filling them in a median of 29 days.
Lease renewals are congesting turnover
Lease renewals performed a main position in fueling demand. Firstly of the 2025 leasing season, nationwide renewal charges climbed to 62.7%, up from 62% the earlier 12 months, in accordance 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 condominium, advertising, and misplaced hire, may be substantial, even when a hire enhance is factored in. That’s why landlords push to maintain dependable tenants.
In line with Zegos’ 2025 Resident Expertise Administration Report, the typical resident retention fee for multifamily corporations is 63%—the very best since monitoring started in 2021. The variety of property administration companies focusing on retention charges of 70% or larger has greater than tripled prior to now 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 accordance with the Minnesota Realtors March 2025 Housing Market Report. Zoning laws and citizen enter (generally often 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 accordance with the MinnPost. The end result has been a rental enhance from 2019 to 2025, by nearly $200 a month, with rents for unsubsidized flats now costlier than the mortgage fee on a median single-family dwelling.
Milwaukee, WI
Dubbed “One in every of America’s Most Cutthroat Rental Markets” by The Wall Avenue Journal, Wisconsin’s largest metropolis is experiencing excessive rental demand because of sluggish improvement.
“The shortage of latest provide is what’s making Milwaukee a scorching rental market,” Chad Venne, the actual property program director on the College of Wisconsin-Milwaukee, instructed the Journal.
Brooklyn, NY
NYC rents surged at the beginning of 2025, in accordance 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 enhance in September, in accordance 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 because of year-over-year progress.
“Many corporations now require employees to be within the workplace at the least two to 3 days a week—so individuals are coming again. For my part, Brooklyn has turn out to be much more standard than Manhattan,” mentioned Redfin Premier agent Ian Rubinstein within the firm’s press launch.
Rochester, NY
Condominium Advisor surveyed its listing of probably 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 employees trying to maximize their rental {dollars}. Rents elevated by 14% during the last 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 reminiscent of Miami and the Chicago suburbs, however tertiary markets surrounding these cities might present good alternatives.
The U.S. housing market shouldn’t be monolithic and liable to vary. Monitor new enterprise improvement (knowledge middle building 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 position in working a worthwhile rental enterprise, and it doesn’t at all times imply jacking up rents at each alternative, as many bigger complexes do. As it might value round $5,000 for a lot of landlords to exchange a brand new tenant, maximizing retention is crucial.
Regardless of document building in some areas, the U.S. nonetheless has a persistent housing scarcity, which is fueling the housing disaster. For landlords keen to scrutinize every market and strategize effectively, continued alternatives await.
