With the peak rental season upon us, rental competition intensifies in many markets across the nation. Phoenix is among the lucky areas where an influx of new apartments in the first part of the year managed to dampen the strong seasonal Phoenix rental competition for properties. Still, there are 10 renters applying for the same vacant unit.
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These are the latest findings from our newly released Competitivity Report which analyzes 137 U.S. rental markets across five metrics: the number of renters competing for a vacant unit, how long an apartment stays vacant, the share of occupied apartments as well as the percentage of renters renewing their leases, and last but not least, the share of new apartments. Based on these, a Rental Competitivity Index (RCI) score is calculated.
Here are more highlights for Phoenix:
- It’s easier for renters to find an apartment in Phoenix this rental season. The city’s supply of new apartments grew by a whopping 1.1% in the first part of year. That’s the second biggest increase in construction in the nation.
- The effect of newly completed apartments can be seen through all the other competitivity metrics. There are 10 prospective renters competing per each vacant unit in Phoenix this rental season, which contrasts with the 15 in 2022.
- Furthermore, apartments stay on the market 10 days more than a year ago, on average 43 days.
- The healthy growth of supply coupled with an overall softening of the rental market led to an occupancy rate of 93%, below the national average by 1 percentage point, further expanding the options for apartment-seekers.
- Renters moved more this year than in 2022. Those who renewed their leases make up 56% of apartment seekers this rental season. This time last year, their share was 65%.
- As a result, Phoenix’s Rental Competitive Index (RCI) score is 47, below the national average of 60. But despite the changes in Phoenix’s competitivity in 2023, renters still have a hard time finding an apartment.
Phoenix rental competition dwindled, but this applies to most Western markets.
- 8 out of 11 Western metros saw a decrease in their Rental Competitive Index (RCI) score compared to a year ago. However most managed to obtain a score above 45, which indicates that these rental markets continue to be competitive. The top 3 hottest metros in the West areMontana (RCI 76), Albuquerque (RCI 74) and Salt Lake City (RCI 64).
- Tucson’s competitivity softened as well, even though here virtually no new apartments entered the market this year. This helped Tucson’s 2023 RCI score stay high at 61.
