2023’s Best & Worst Places to Rent in America
WalletHub July 11, 2023
J. David Chapman
Ph.D. – Realty1, LLC, Owner/Broker – University of Central Oklahoma, Real Estate Professor and State of Oklahoma, Real Estate Commissioner, City of Edmond, Former City Council member
Homeownership isn’t for everyone. Roughly 44 million American households have opted to rent rather than buy their homes because of convenience, cost or both. But renting isn’t always a cheaper or better alternative to owning a property. The right road to take depends on a variety of factors, including an individual’s or family’s financial means and how well the local real-estate market is doing.
Inflation has significantly impacted rental prices, and 2022 saw the second-highest price growth in decades, a 6.2% year-over-year increase. Meanwhile, mortgage rates have also experienced big year-over-year jumps. Like home prices, however, rental rates can vary significantly by region, state or city. In some places, renting will prove to be more cost-effective and a better overall value than owning.
To determine where renters can get the most bang for their buck, WalletHub compared more than 180 rental markets based on 21 key measures of rental attractiveness and quality of life. Our data set ranges from the difference between rental rates and mortgage payments to historical price changes, the cost of living and job availability.
What tips do you have for a person looking to get the best value in an apartment?
It is very important that a person find the appropriate living situation for their lifestyle. The amenity package associated with apartments are very different. Pools are important to some and not others. Workout facilities are important to some and not others. Dog parks are important to some and not others. Gift wrapping, libraries, play grounds, tennis, basketball, pickleball, coffee stations or shops – you name it you can find it. If they are important they can be of good value, but if you don’t use the amenity it is simply something you are paying for and not using. This creates a poor value proposition. Even within the amenity it might not be a good value. Pools are an important amenity in apartments, but many young adults don’t like being at pools with friends partying around children. Many with families don’t appreciate the young adults partying around their children. Many prefer a quiet environment and many prefer a more socially-active complex. We are seeing more and more niche- oriented apartments to cater to the difference preferences. This can create great value to the tenant.
What are the most common mistakes that renters make when searching for a new apartment?
Rushing to sign the lease without due diligence. Making sure the complex matches their lifestyle. They might get a referral from someone that is looking for a totally different living experience. Watch for add-on charges such as parking. The reputation of the management company and ownership is huge. They need to have a reputation for taking care of their properties and keeping their tenants – providing a safe environment. Pets are big deal. I see people rent in places that won’t allow pets and want one later only to find out they are not allowed. I also hear of tenants bothered by other tenant’s pets barking and such. Tenants need to be clear on pet policies. Some markets parking is important, and some markets the availability of public transportation is important. Again, due diligence to ensure the apartment fits the lifestyle. It is also important to understand that lifestyle preference change so short leases are important.
In evaluating the best and worst cities for renters, what are the top 5 indicators?
Availability. We are going through an affordable housing crisis in the U.S. Some markets are in better shape than others. Some markets have an unreasonable distaste for multifamily projects creating a scarcity in product. This has an effect on supply and demand leaving less choices and options for renters.
Pricing. The availability, and city and citizen’s acceptance, of multifamily projects will greatly affect the affordability of apartments. Look for cities with an appreciation for diversity in housing products.
Location. This is particularly important for workforce and education. Tenants want and need to be near their “thing”. Whether that is work, school, church, or family it is important to be within a reasonable distance whether walking, vehicle, or public transportation.
Public/City Amenities. Particularly in the urban core pubic amenities that are available to tenants make the amenity package in apartments less important. Activities/amenities such as parks, rivers, lakes, bars, restaurants, libraries, and sporting events in the public realm make the amenity package in the apartment less important and less expensive.
Safety & Security. Renters desire and deserve a safe environment. The city has the responsibility to ensure the living quarters are safe and up to current code providing a safe environment. Public safety in areas surrounding apartments are important and crime statistics are important to renters.
What listing details have become more important when searching for a place to rent during the current economic crisis?
I believe the same as above – they really have not changed much.
Are the fastest growing cities a good place for renters? Why?
In my opinion the best value is in the secondary cities and cities with some growth, but necessarily the highest growth. City growth is important for employment opportunities, but high-growth could have an adverse event on affordability of housing options.
Will the way the cities handled the COVID-19 health crisis influence in any way the renter's choice when looking for an apartment?
Yes. Cities that shut down businesses and economies will not be the first choice of renters that have options. They will go to cities that took a reasonable approach to the pandemic while allowing citizens to continue to work and support their family obligations. Cities that helped keep businesses open with financial-support options will also be looked on favorably.
How can local policymakers make housing more affordable for renters without upsetting homeowners?
There are grants available for affordable housing. The problem is they are generally reserved for home buyers. We need additional programs for responsible landlords and rental property owners to make repairs and help make their apartments and rentals safer and more affordable. Renting needs to be a respectable alternative to purchasing.