High-Income Millennials Aren’t Backing Out of the Rental Market

Apartment supply is dwindling in many smaller metros across the U.S. without much new development and a surge in rental demand. As a result, metros like Denver are seeing an average of 14 prospective renters sending applications to every vacant apartment on the market, The Denver Post reports.

Eugene, Oregon ranked as the nation’s most competitive rental market in 2021, followed closely by San Diego, Knoxville, and California’s Central Coast region. Not only are apartments becoming more difficult to find, but high-income millennials priced out of an expensive real estate market are also driving up competition by raising the average credit score of applicants for available rental properties.

Of the 105 largest markets examined, apartment supply tended to be much tighter in smaller metros than in larger metros, reflecting both the lack of attention developers have paid to those smaller markets and the flexibility in relocating that remote work has provided. Eugene ranked as the nation’s most competitive apartment market in 2021, followed by San Diego and Knoxville. California’s Central Coast region ranked fourth tightest, followed by the Lehigh Valley and Sacramento.

The large vs. small metro theme played out in Colorado, where Denver ranked 38th while Colorado Springs ranked as the 27th tightest apartment market, even though both had a similar occupancy rate of 95.4%, which matched the U.S. occupancy rate, according to Yardi Matrix.

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