In this article, we will look at 20 US cities with the lowest rental vacancy rates. If you want to skip our detailed analysis of the real estate industry, you can go to the 5 US Cities with the Lowest Rental Vacancy Rates.
Recent Trends in the Real Estate Development Market
According to a report by Mordor Intelligence, the real estate market was valued at $2.53 trillion in 2023. The real estate industry is expected to progress further and grow at a compound annual growth rate (CAGR) of 2.04% between 2024 and 2028, reaching $2.80 trillion by the end of the forecasted period. Even though COVID-19 had a detrimental effect on the real estate market, the market managed to recover rapidly. Post-COVID, many investors and purchasers benefited from the newly decreased interest rates and bought their homes or property for business. The demand consistently increased and by 2022 the percentage of homes sold was significantly higher than before COVID. Homeowners sold their properties at significantly higher rates than what they originally advertised and the prices continued to increase even more with the unavailability of further options.
The continuous augmentation of property values means that homeownership has become impossible for a large faction of society. However, as a report by IBIS World highlights, landlords are effectively benefiting from this market trend. The more difficult it becomes for consumers to gain homeownership, the only remaining option is to rent. Lessors increase rental rates and in effect benefit significantly each year. Metropolitan cities generate the largest number of renters with landlords letting units/apartments in large complexes. Spacious, high-end luxury apartments are in high demand by wealthy renters and so luxury apartment complexes are at the top of the rental market. Landlords take advantage of having wealthy consumers and thus generate the best possible profit margin.
Top Real Estate Companies and Their Recent Developments
Belpointe OZ (NYSE:OZ), is an American commercial real estate management company that offers services related to the development, redevelopment, and acquiring of real estate. On November 14, Belpointe OZ (NYSE:OZ) announced that it had signed with Greystar, a rental housing management company, as the property manager for Aster & Links. The latest project by Belpointe OZ (NYSE:OZ), the Aster & Links building is a 10-story high-rise building project that will house 424 apartment homes in Sarasota, Florida. This project will offer a myriad of amenities including a fitness center, parking, and courtyards for customers and also help in expanding Sarasota’s economy.
Anywhere Real Estate Inc. (NYSE:HOUS) is an integrated residential real estate services company with a diverse portfolio of real estate subsidiaries. It is based in the US and has a presence in 117 other countries. On November 20, Anywhere Real Estate Inc. (NYSE:HOUS) announced that it reached a settlement of $83.5 million against the claims that were brought and could be brought against the company in the Burnett, Moehrl, and Nosalek antitrust class action litigation. Anywhere Real Estate Inc. (NYSE:HOUS) emphasized that the settlement is not an admission of guilt nor does it validate the claims made against the company. As part of the settlement, the company will also be required to make changes in its practices, including its subsidiaries.
Fathom Holdings (NASDAQ:FTHM) is a US-based technology-driven real estate company that uses the proprietary cloud-based software IntelliAgent for its services. The company offers residential brokerage, title, mortgage, and insurance services. On December 7, Fathom Holdings Inc. (NASDAQ:FTHM) announced that it had signed Advance 1 McKeever, a real estate brokerage, to help expand its business and services in California. With access to the IntelliAgent system, these new agents with help expand Fathom Holdings Inc. (NASDAQ:FTHM) for a multitutude of real estate services in California.
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Methodology
To list the 20 US cities with the lowest rental vacancy rates, we used data collected by the US Census Bureau. We used data obtained for the fourth quarter of 2022, which reflected the rental vacancy rates for US metropolitan areas. Some metropolitan areas are comprised of several cities collectively, however, we have highlighted the principal city in each metropolitan area which reflects the low rental vacancy rate. We have listed the US cities with the lowest rental vacancy rates in ascending order below.
20 US Cities with the Lowest Rental Vacancy Rates
20. Hartford
Rental Vacancy Rate: 4.4
Ranking twentieth on our list of the twenty US cities with the lowest rental vacancy rates in the US, Hartford is the capital of the state of Connecticut. Hartford is the principal city of the Greater Hartford metropolitan area and the fourth largest city in Connecticut and is known as a global city due to its large population and growing economy. The rental vacancy rate in Hartford is 4.4.
19. Detroit-Warren-Dearborn
Rental Vacancy Rate: 4.4
The cities of Detroit, Warren, and Dearborn make up the metropolitan area of Michigan, known as Metro Detroit. With Detroit as its principal city, Metro Detroit is a major metropolitan economy in the US and is home to 17 Fortune 500 companies. The rental vacancy rate in Detroit, Warren, and Dearborn is 4.4.
18. Columbus
Rental Vacancy Rate: 4.2
Ranking eighteenth on our list of the twenty US cities with the lowest rental vacancy rates in Columbus, the capital of Ohio. It is the principal city of the metropolitan area of Columbus and it is the 14th most populous city in the US. The rental vacancy rate in Columbus is 4.2.
17. Buffalo-Niagra Falls
Rental Vacancy Rate: 3.8
Ranking seventeenth on our list of the twenty US cities with the lowest rental vacancy rates, Buffalo and Niagra Falls are a metropolitan area. With a population of over 1.2 million, this metropolitan area’s principal city is Buffalo. It has a rental vacancy rate of 3.8.
16. Providence Warwick
Rental Vacancy Rate: 3.8
Providence is the capital of the state of Rhode Island and is also the most populous city in the region. it has a population of over 1.6 million residents and houses several industries such as textile manufacturing. The rental vacancy rate in Providence Warwick is 3.8.
15. Rochester NY
Rental Vacancy Rate: 3.7
The city of Rochester in New York is part of the metropolitan area of Western New York. It is commonly known as the ‘the Flower City’ and ‘the Flour City’. Rochester NY has a rental vacancy rate of 3.7.
14. Grand Rapids – Wyoming
Rental Vacancy Rate: 3.7
Ranking fourteenth on our list of the twenty US cities with the lowest rental vacancy rates, Wyoming is in the Grand Rapids metropolitan area of West Michigan. It has a rental vacancy rate of 3.7.
13. Charlotte-Concord-Gastonia
Rental Vacancy Rate: 3.4
The cities of Charlotte, Concord, and Gastonia make up the Charlotte metropolitan area, commonly known as Metrolina. The city of Charlotte is the principal city of the region, one of the fastest-growing metropolitans in the US. It has a rental vacancy rate of 3.4.
12. Los Angeles
Rental Vacancy Rate: 3.3
The City of Los Angeles is the most populous in California and is the principal city of its metropolitan area. With a culturally and ethnically diverse population of over 3.9 million, it is a lively and busy place. Los Angeles has a rental vacancy rate of 3.3.
11. San Diego
Rental Vacancy Rate: 3.2
Ranking eleventh on our list of the twenty US cities with the lowest rental vacancy rates, San Diego is in the state of California and has a population of over 1.3 million residents. San Diego has a rental vacancy rate of 3.2.
10. Cleveland-Elyria
Rental Vacancy Rate: 3.1
Ranking tenth on our list of the top twenty US cities with the lowest rental vacancy rates, the cities of Cleveland and Elyria make up the Cleveland metropolitan area. It is the largest metropolitan area in Ohio and consists of a six-county area. It has a rental vacancy rate of 3.1.
9. Boston- Cambridge
Rental Vacancy Rate: 3.1
The principal city of the Greater Boston metropolitan area is Boston, also the capital of the state of Massachusetts. This region of Boston and Cambridge is home to institutions like Harvard and MIT, and so has a lot of student residents. Boston and Cambridge have a low rental vacancy rate of 3.1.
8. New York-Newark-Jersey City
Rental Vacancy Rate: 3.1
Ranking eight on our list of the twenty US cities with the lowest rental vacancy rates are the cities of the New York Metropolitan area. New York, Newark, and Jersey City make up the Tri-State area and are the most populous metropolitan and urban areas in the world. With over 20 million residents, New York, Newark, and Jersey City have a low rental vacancy rate of 3.1.
7. Salt Lake City
Rental Vacancy Rate: 3.0
Ranking seventh on our list of the 20 US cities with the lowest rental vacancy rates, Salt Lake City is the capital of the state of Utah. It is the most populous city in the state and attracts a large number of tourists for skiing and outdoor recreational activities each year. The rental vacancy rate in Salt Lake City is at 3.0.
6. Riverside-San Bernardin0-Ontario
Rental Vacancy Rate: 2.9
The cities of Riverside, San Bernardino, and Ontario make the metropolitan area commonly known as the Inland Empire. This area has over 4.6 million people, with most of the population residing in Riverside and San Bernardino. With a large number of people consistently migrating, the rental vacancy rate in Riverside, San Bernardino and Ontario is at a low 2.9.
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