The Hot US Rental Market and its Impact on Relocations

The rental market across the United States is scorching hot right now. Rents are spiking at double-digit rates nearly everywhere. For renters looking to relocate, the ultra-competitive market poses major affordability and availability challenges. This red-hot rental market impacts budgets and adds frustrations to moves. 

In this SEO blog post, we’ll break down key forces driving record rental demand. You’ll get data-driven insights on trends in major metro areas coast to coast. Most importantly, get tips to improve your rental search and lock in housing despite fierce competition. With the right preparations, you can still land a great new rental even when vacancies are ultra-tight.

You may like to read A Complete Blog to Zone Skipping Logistics Strategy

Surging Rents Nationwide

Let’s begin with the data showing just how hot rents have gotten. According to rental listing portal Apartment List, median US rents jumped nearly 10% last year. That’s some of the fastest annual growth ever recorded. Rents in suburban neighbourhoods saw some of the biggest increases as remote work continues fueling demand for larger spaces.

But the fastest rent growth is happening in popular Sunbelt migration destinations like Miami (+26%), Phoenix (+19%), and Nashville (+16%). Tech hubs out West, like San Jose (+16%) and Seattle (+12%) also show rapid gains. Put, rents are skyrocketing almost everywhere, giving renters sticker shock.

Key Metro Area Rental Market Trends

Metro area rental markets fall into a few categories right now. Sunbelt cities lead in rent growth thanks to a pandemic influx. Big coastal cities also rebounded in 2022 after rents plunged early in COVID. Rents moderated in pandemic boomtowns like Boise, while heartland markets trailed but still saw gains.

Here’s a detailed breakdown of key rental market trends by metro area categories:

Sunbelt Metros – Cities across the Southeast and Southwest top the charts for rent growth. Pandemic migration accelerated severely supply-constrained markets. Miami, Phoenix, Las Vegas, and Nashville all saw rents rise over 25% in 2021-2022.

Tech Hubs – West Coast tech centres endured big city exoduses early in COVID. But tech IPOs have sent incomes and rents soaring back. San Jose, San Francisco, and Seattle all bounced back over 10% last year.

Heartland Metros – Previously laggards, heartland cities like St. Louis, Kansas City, and Columbus topped 8% rent inflation. Pandemic savings and remote work allow more mobility from coastal cities.

So what’s driving the rental spike felt nationwide? And why the huge differences across metro areas?

Key Factors Fueling Record Rental Demand 

The pandemic severely disrupted living patterns and fueled major lifestyle changes. City dwellers relocated as remote work provided new freedom. Millions moved closer to family for support bubbles. Others sought affordable cities to make savings last longer. Now, reversing migration patterns plus key demographics are driving surging rental demand.

Here are the 4 key factors fueling today’s sizzling rental market:

1. Millennials Forming New Households 

Like previous generations, Millennials delayed life milestones amid a slow economic recovery from the Great Recession and student debt burdens. Many lived with parents or roommates through their 20s. Now in their 30s, Millennials are finally moving out and forming their households.

2. Gen Z Entering Rental Markets

Younger members of Gen Z who just graduated college over the last couple of years are looking to move out of dorms and student housing. Their surge as new rental market participants is unprecedented.

3. Remote Work Mobility

Pandemic lockdowns forced offices to embrace remote work capabilities. Even as offices reopen, remote and hybrid schedules provide many professionals with incredible freedom to relocate. New migration trends away from costly coastal cities intensified during COVID.

4. Housing Shortage 

An extreme housing shortage after the Great Recession’s construction slump severely limits rental stock – especially new apartments. While builders race to catch up, inflated material costs stretch budgets. Limited supply amid soaring demand enables landlords to push rents higher.

Record-Low Vacancy Rates Squeeze Relocating Renters

Burdensome rents result directly from low vacancy. Rates below 5% indicate tight supply and translate into pricing power for landlords. Vacancy rates in America’s 150 largest metros stand at just 5.8% – well under the 6.5% economists say signals a balanced rental market.

In the hottest Sunbelt cities like Nashville, vacancy dipped below 2% recently. That means just 1-in-50 apartments are available for new renters. Coastal tech hubs and smaller heartland cities hover between 4-6% – still extremely competitive. 

Simply put, low vacancy prevents renters from shopping around. Relocating renters must act swiftly on new listings and prepare all needed paperwork. That’s the tradeoff for vibrant job markets with abundant amenities.

Tips for Relocating Renters in Today’s Climate  

No doubt, the blazing rental market poses challenges for renters planning moves. But with the right preparations, you can still achieve housing goals without breaking budgets. Here are 7 tips for renters looking to relocate into hot markets:

1. Get Prequalified

Come prepared with pay stubs, tax returns, and bank statements to show income stability. Many landlords now run full background and credit checks. Fix any credit issues ahead of time and gather references.

2. Know The Market 

Research rents and vacancy rates in surrounding neighbourhoods – not just downtowns. Consider commuter cities and suburban areas to compare options under your budget across the metro area.

3. Set Expectations

Today’s market means relocating renters must compromise. Lower expectations on unit sizes, amenities, and locations to open more affordable choices. Consider studios or sharing if budgets feel too strained. 

4. Prepare Paperwork  

Assemble all essential documents in advance for rental applications – ID, income/employment verification, references, past rental history, etc. In hot markets, ready paperwork gives your application a leg up.

5. Schedule Tours Quickly

Hot listings go fast, so try to see units in person within 48 hours of posting. Be ready to submit applications on the spot with all materials ready. Ask about application fees and security deposits upfront.

6. Act Fast  

Seriously, apply within 24 hours if you love a unit. Competitive markets mean the best listings go to whoever moves quickest. Be ready to adapt if you lose out, too – have backup options lined up.

7. Build Savings

Plan for moving costs like deposits and agent fees equal to 2 months’ rent, Van lines, and overlaps with current leases. Emergencies happen too – have 3-6 months’ full housing costs in savings when relocating.   

Relocating Renters Can Still Find Great Housing 

Record rents and fiercely competitive demand leave many renters feeling priced out of relocating altogether. But with ample preparation and focus, you can still achieve affordable housing goals in growing job markets. The key lies in setting expectations on space or amenities and acting swiftly when you find viable options.

Consider the long-term income potential or lifestyle perks certain cities offer. Weigh those against temporarily downsizing into more affordable rentals for a few years. Rental markets always see disruptions – when one metro declines, others emerge. But renters willing to adapt can take advantage of opportunities opening in vibrant areas.

With planning tools and tips outlined here, relocating renters can develop effective strategies for securing great housing even when availability drops. Don’t let temporary imbalances in rental markets halt moves aligned with career or personal priorities. Maintain flexibility and diligence in your search to overcome today’s ultra-competitive demand.

Conclusion

The soaring rents and ultra-competitive rental markets making headlines paint a daunting picture for renters looking to relocate. However, with proper planning, flexibility, and managed expectations, finding a rental that fits your needs and budget is still achievable. Being informed of the market conditions in your target destination and timing your search to balance tradeoffs can go a long way. 

The rental market always sees fluctuation – even if intense demand persists for some time. By following tips to expand options and control costs, renters can develop effective strategies to navigate their moves despite current challenges. With the right preparations, a hot rental market does not have to put major moves out of reach.

Universal Relocations can help you and your employees coordinate a successful relocation experience that is tailored to the skills and needs of your business and talent.