If you’ve heard the term “glass half full or half empty?”, keep that in mind as you read these rental market updates in North America for the fourth quarter. Positive economic factors appear to be aligning in the US compared to the third quarter, rental market stability continues in Mexico, while Canada continues to present challenges for existing and new renters. Read our latest update below, gathered from Dwellworks experts across North America, to see the factors at play.
US Trends
Rental Prices: Many apartment hunters may rejoice to hear that the rate of price increases in most rental markets in the US has flattened this year overall, according to Moody’s Analytics. Dwellworks experts advise that those transferring for work and starting their rental home search should keep these caveats in mind:
- Though the trend is towards smaller to no increases in most metro areas, markets are always ‘local’ and not all will reflect the national average
- Rental data reporting lags behind government inflation reporting overall – look for the news on rental market slowdowns in coming government economic updates
- Smaller increases do not mean ‘falling rents’ – rental prices are stable-to-increasing more slowly, but they are not falling back
NOTE: For high-volume relocation markets, the national averages for increases, price, and availability may not apply. Relocating employees tend to rent in more expensive, upscale neighborhoods with greater competition for listings. Check with your Dwellworks Destination Consultant for local guidance.
Apartment Supply vs. Demand: Availability is trending back to historic norms as the supply of new apartments continues to increase in the US in multiple markets. As a result, vacancy rates are at or above the benchmark of a ‘balanced market’ norm of 6%. The renter demand population remains high, however, as renters have few options to move into home purchases, based on property availability and high interest rates. New single-family homes remain in short supply across the US, because of the high cost of labor, materials, and financing. Dwellworks experts advise customers to expect limited options in many markets, though our local experts, with their frequent communications with property development and community managers, often have a ‘first look’ as options become available.
Canada Trends
General Overview: Canada remains a very desirable place to live, making the property market a very challenging one. Inflation rates are also higher than in the US and new construction activity is much lower. Additionally, the expanded immigration/digital nomad policies that have increased the country’s labor supply have also increased the demand for rental properties in key employment centers.
Rental Prices: Rental vacancy rates in Toronto and Vancouver remain at 1-2%, with rental rates likely to continue to increase. This means renters must be prepared to act quickly, be flexible in their expectations, and have documentation fully in order when they’re looking to secure housing. Being prepared and ready to act helps transferring employees become a ‘first choice’ among landlords with many qualified applicants.
Mexico Trends
General Overview: Many multinational corporations staff their regional operations in Mexico City, because of its sophisticated but less expensive global gateway location. Housing is less expensive here than in Miami or Los Angeles but is by no means ‘low cost.’ Mexico’s strong economic growth in 2023 is fueled by the trend of many US companies nearshoring their manufacturing here and away from Asia.
Rental Prices: Throughout Mexico’s key corporate relocation hubs, rental housing supply is available. The cost of rent in manufacturing hubs such as Queretaro or San Luis Potosi is significantly lower than in the capital.
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