Top 10 Most In-Demand Cities for Renters in the West

Economic Watch: Robust Job Growth Keeps Fed Cautious link

• The U.S. economy added 353,000 jobs in January, nearly doubling the expected 185,000. This surge in employment, with significant upward revisions for November and December, signals a robust labor market.

• Despite strong job growth, the unemployment rate remained steady at 3.7%. The labor force participation rate was unchanged at 62.5%, and average hourly earnings rose by 4.5% year-over-year, indicating sustained wage growth.

• The Federal Reserve is likely to maintain a cautious stance on rate cuts until May, influenced by the strong labor market. High capital costs are expected to temper real estate investment activity in the first half of 2024, with leasing resilience amidst an uncertain business environment.

U.S. Apartment Occupancy at a Decade Low link

• U.S. apartment occupancy fell to 94.1% in December 2023, the lowest since January 2014. This drop is over 100 basis points behind the decade average of 95.4%.

• Despite a construction boom, some markets still perform well. A few smaller markets and college towns like Champaign-Urbana and College Station-Bryan exceed their decade averages by over 100 basis points.

• The largest declines were seen in cities like Jacksonville, Phoenix, and Austin, with occupancy falling more than 230 basis points below their 10-year averages. Sun Belt markets, despite high demand, have struggled against the surge of new supply.

Top 10 Most In-Demand Cities for Renters in the West link

• Denver leads as the most popular city for renters in the West, celebrated for its outdoor activities, arts scene, and dynamic job market. Renters are drawn to its balance of city life and nature, with the Rocky Mountains as a stunning backdrop.

• Portland, OR, and Albuquerque, NM, offer unique living experiences, from Portland's quirky charm and green lifestyle to Albuquerque's rich Southwestern culture and sunny days. Both cities cater to renters looking for distinct cultural and environmental benefits.

• Emerging cities like Chandler, AZ, and Peoria, AZ, highlight the growing appeal of suburban areas with their mix of urban amenities, family-friendly environments, and affordable living. These cities demonstrate a shift towards suburban living without sacrificing access to urban conveniences.