US, Canada, and Mexico Rental Market Updates for the First Quarter of 2024

2024 is starting on a positive note for rental markets in the US and Mexico, but not so much for Canada, where there are ongoing concerns regarding cost and availability. As we noted in the fourth quarter update for 2023, positive economic factors like a slowdown in the rate of rental price increases, increased apartment vacancies, and a better balance in supply and demand are leveling out nearly all US markets, while Mexico benefits from economic growth and continued investment in housing. Canada continues to be an attractive relocation and immigration destination but is a region where rental housing remains scarce and at a premium price in key locations.

Read our latest update below, gathered from Dwellworks experts across North America, to see the factors at play.

US Trends

A continued slowing in rental increases and a spike in vacancy rates are good news for most US markets. While the US single-family home continues to adjust to its post-pandemic reality of scarcity and high prices, the rental markets have largely stabilized, making it possible to plan relocation activity with less volatility and, in general, increased availability. Here are a few key takeaways:

• The average rate of rental increases slowed to 3% nationally by year-end 2023 and should remain low in 2024
• The national vacancy rate is above 6%, which is good news for renters in most markets
• New construction investments that began in 2021/22 came to market in multiple cities in 2023 - bringing supply more in line with demand.
• As lender interest rates increased and many regional supply needs have been met, fewer new units are under construction for delivery in 2024/2025
• Year-over-year rental rates decreased most sharply in pandemic hotspots like Austin and Portland
• Renters are still heading to major urban locations – NYC has one of the lowest vacancy rates in the country
• Renting is still less expensive than buying in most US markets and the renter population will remain high until mortgage interest rates decline and single-family housing supply increases
• Renters prefer to preview options online and use digital resources to tour and sign leases (per Zillow Research)
• NOTE: For high-volume relocation markets, ‘national averages’ in pricing trends and availability may not apply. Relocating employees tend to rent in more expensive, upscale neighborhoods with greater competition.

Canada Trends

It’s not all good news in the North American rental market. In Canada, vacancy rates remain very low (below 2%) and rental rates continue to climb (although subject to rent control), making for tough conditions for anyone looking for a new place to lease. Here are a few key takeaways:

• Canada welcomed over 500,000 new immigrants in 2023 as the country continues to build its workforce
• Most immigrants move to key employment markets such as Toronto, Montreal, and Vancouver
• Rental vacancy rates in these markets remain very low (1-2%)
• Rental costs are increasing, but rent control laws limit the annual adjustment allowed
• High interest rates for construction loans and strict rent control are disincentives for developers and contribute to an ongoing lack of rental housing supply

Mexico Trends

Mexico continues to grow its economy with more industries and multinational corporations investing in the country. Increased demand has so far meant a modest increase in rental rates versus late 2023, since supply is also increasing due to the attractive opportunity for investors. Here are a few key takeaways:

• Led by nearshoring investments, the Mexican economy continues to expand, attracting more relocation activity
• Rental costs in preferred Mexico City neighborhoods have increased and are similar to those in high-growth US markets such as Northern Virginia and Nashville, TN
• Rental rates in the Queretaro region, home to aerospace and automotive manufacturing, reflect increased activity in both supply and demand
• Housing is in good supply in most markets
  
  

Read our blog or subscribe to our newsletter for all other quarterly market updates.

About Dwellworks: 

Dwellworks is the world’s largest provider of destination-related services and temporary living solutions for the globally mobile workforce and business travelers. We provide business-to-business solutions for Fortune 1000 and emerging companies through their relocation management partners. Whether a company needs to relocate its employees across the world or the country, we provide a range of support services to relocation management companies and businesses to help employees and their families transition successfully from their home location to a new destination. 

Dwellworks operates according to our core values of Integrity, Teamwork, Performance, Innovation, and Fun. These are the root of everything we do – from the Teamwork aspect of sourcing and supporting our helpful local Consultants to assist any relocating employee in hundreds of cities worldwide with their move, to the Integrity of our highly-trained Intercultural experts who are here to help transferees adjust to new cultures and confidently settle into their destination locations, to the Innovation of our myDwellworks technology platform technologies that familiarizes employees on assignment with their destination and enables customized conversations on properties, schools, and situation-specific needs.   

Dwellworks supports the diversity of our clients’ globally mobile workforce with personalized destination solutions in 16 countries, covering major relocation markets. Dwellworks has consistently responded to the mobility services and needs of our global clients. In 2020, Dwellworks launched Dwellworks Living to expand our original portfolio of corporate housing markets to include a full-service corporate housing operation, offering alternative accommodations for relocation and business travel customers in 125 countries. In 2023, we launched Dwellworks Move, providing both destination services and corporate housing to small and medium-sized businesses. Our full-service real estate brokerage, Station Cities, supports home rentals, sales, and purchases in the Tri-State New York area and Chicago. Visit our homepage, learn about our services, and read our blogs to learn how we can help with your relocation and business travel needs.