New apartment construction was at a record high last year, yet the U.S. rental market hasn’t eased much as of early 2025, according to a new report from Rent Cafe.
The East Bay, in particular is showing increased demand. The East Bay — Oakland, Fremont, Hayward and Richmond are noted in the report — has also become more competitive. Its Rental Competitiveness Index score has jumped 7.6 points to now stands at 72.3, placing it 49th in the country.
Remote work continues to shape the apartment landscape in the Bay Area and may be a reason for the East Bay rental market heating up. Some San Francisco residents move to East Bay locations seeking more space for the money while still being within commuting distance of their jobs, according to the report.
The Silicon Valley also remains a rental hot spot with a Rental Competitiveness Index of 79.6, which ranks 16th in the nation.
Nationwide, with fewer newly built apartments, the supply has tightened, thereby prompting more renters to stay put. Accordingly, lease renewal rates have climbed to 51.2%, up from 44.8% in early 2024, and further limiting the available options. As a result, apartments are filling up faster than last year, with even more renters competing for each vacant unit, according to the report.
Of the 139 markets analyzed, only 11% have experienced any noticeable easing compared to the start of 2024. Moreover, although the number of available apartments has increased slightly by 0.75% compared to last year’s 0.67% growth, there are still not enough rental units to meet demand, the report notes.
The complete study can be viewed here: https://www.rentcafe.com/blog/rental-market/market-snapshots/us-hottest-rental-markets/.
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