Midwest Rental Markets Flourish Amid Changes in Phoenix

News Summary

As 2025 approaches, the Midwest emerges as a leading rental market, with ten cities making the top 20 competitive list. Suburban Chicago shines with affordable options, while Phoenix experiences a rental transformation due to a construction surge. Developers are building thousands of new apartments, leading to decreased rental prices and increased competition. As these markets evolve, renters now have more choices, making it an exciting time for those searching for homes in both regions.

Midwest Rental Markets Thrive, While Phoenix Sees Fresh Changes!

Big news for apartment-seekers in 2025! The Midwest is shaping up to be the hottest place to hunt for a new home. With ten cities making it to the top 20 most competitive rental markets in the country, renters are in for a treat. Now, before you pack your bags and head to Chicago or Indiana, let’s dive into some of the exciting shifts happening across these regions.

Midwest On Fire: Affordable, Spacious Living!

Kicking things off, let’s focus on suburban Chicago, which proudly sits in the second position nationwide, just behind sunny Miami. This adorable area boasts incredible rental choices, and despite a bit of cooling in the Florida market, Miami still holds strong. Even the big city of Chicago ranks 18th, proving that the Chicagoland area has a lot to offer renters.

What’s drawing people to the Midwest? It’s all about affordability and space. With so many people working remotely now, many are looking to escape the high costs of larger cities. Smaller metros, too, are becoming popular rental spots, with places like Lafayette, Indiana, making waves by taking third place in the rankings for small rental markets.

Phoenix: A New Era in Rental Prices

Phoenix. The rental market here is undergoing a transformation, and it’s mostly due to an enormous construction boom. Developers have built 13,500 new apartments in Maricopa County in 2023. This number jumped to a staggering 20,000 units in 2024, and expectations for 2025 suggest another 26,000 units hitting the market. That’s a lot of new homes!

rental prices have seen a welcome dip, dropping by 2.2%, which translates to about $46 less each month. This change is refreshing following previous years when rents skyrocketed by as much as $400-$500 a month. Right alongside this, we’re seeing the occupancy rate decrease by 0.4%, indicating a more competitive atmosphere for potential renters.

The Numbers Aren’t Lying

93.6%, while the lease renewal rate has ticked up to 62.2%. On top of that, the rental competitiveness index (RCI) for Phoenix sits at a healthy 66 out of 100. For those looking to rent, there are about 9 applicants for each vacant unit, and units typically rent out in just 42 days.

Innovative Housing Solutions for a New Generation

build-to-rent housing, with over 4,000 units added in 2023 alone. This concept has quadrupled inventory in just five years! Additionally, the practice of converting offices into apartments is also taking root, expecting to bring more than 850 units online soon.

$1,500 per month, you can get around 793 square feet in Phoenix – smaller than many other cities in Arizona. If you’re a part of Gen Z, expect to shell out approximately $150,912 in rent by the time you reach 30. Interestingly, projected earnings for Gen Z in Phoenix are anticipated to exceed those of Millennials during the same age period, totaling $562,432.

What Lies Ahead?

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Additional Resources

• AZ Big Media: Competitive Phoenix Rental Market
• AZ Family: Phoenix Area Rent Prices Dropping
• Redfin: Is Now a Good Time to Buy a House?
• AZ Central: Metro Phoenix Housing Market Forecast
• Phoenix New Times: Arizona Housing Costs
• Wikipedia: Real Estate in the United States
• Google Search: Phoenix rental market
• Encyclopedia Britannica: Real Estate
• Google News: Phoenix real estate
• Redfin: Phoenix Real Estate Market Overview

Author: HERE Phoenix