Landlords reporting bidding wars for vacant apartments (50% increase in applications)

Today I'm gonna tackle one of the biggest mysteries that is befuddling me about the U.S. housing market, and that is who is living in all these brand new luxury apartment buildings that are getting built across America. If you guys live near any major city in the U.S., chances are you are seeing these buildings get built over the last couple years, and they're charging crazy, crazy rents. We're talking one bedrooms for 2,000, two bedrooms for 3,000, three bedrooms for 4,000 a month, when just five years ago these rents were half that amount in some of these cities. And what's kind of interesting to me is what these landlords are now reporting, everyone. The landlords are saying that they're experiencing a record amount of demand to lease these apartments. Tons of people coming in the door looking to rent the units, and the occupancy rates are going back up, suggesting that something big is happening in the U.S. rental market right now, and that we could see rents start going back up over the next couple years. In fact, Redfin just reported that we had the highest asking rent growth in over two years in the summer of 2025. But here's what's confusing me, everyone. It's the fact that the demand to rent these apartments should be going down right now, because when you think about all the things happening in the U.S. economy right now, from collapsing immigration to the bad job market for recent college graduates, you would think that there wouldn't be a lot of people lining up to rent these apartments. But here's the data these landlords are reporting. They report to a service called RealPage, which is a property management system that many landlords around the U.S. are enrolled in that manages their leasing. And this property management system is saying that over the last 12 months, we had 790,000 extra apartment units absorbed, and that that's actually one of the highest levels of apartment demand on record. And that in the second quarter of 2025, we had 227,000 apartment units absorbed, which was one of the highest levels for any second quarter going back in history. And in this building right behind me here in Nashville, everyone, this is a brand new property. I actually drove by this property about six months ago and showed it to you guys in a video, heavily under construction back then. Now it looks to be almost finished. Can you guess what they're charging at this property for rent? Well, if you go on their website, a studio starts at 1,500 a month. That's a 450 square foot studio for 1,500 a month. The one bedroom start around 1,800, 1,900 a month. And get this folks, the two bedrooms start at 2,900 a month. And those rents feel pretty high to me. They feel like a lot of renters would struggle to afford them. And I actually polled you guys and I asked you the question, how much would you pay in rent to live near a downtown area in America? Like what would you pay in rent to live near a downtown area? We're near downtown Nashville right now, where this is being filmed. And this poll specifically asked, how much would you pay to live in a brand new building downtown like the one behind me? Well, 29% of you said you would pay 1,500 a month max to live in one of these buildings. 22% of you said you would pay 2,000. 14% of you said you would pay 2,500 plus. And 35% of you said you would never even live in a downtown area. Now these landlords desperately need more demand. They've been having to cut the rents and cut the rents by a lot in some of these cities where they built a lot of apartments over the last year. In particular, data from RealPages showing that the markets with the biggest rent cuts are Austin, Texas at minus 7.5% in the last year, Denver at minus 5.9%, Phoenix at minus 4.9%, San Antonio, Orlando, Dallas, Nashville, Las Vegas, Atlanta, and Fort Worth. All of these markets already have declining rents. The rents are dropping in those cities. And in a city like Austin, the rents are down almost 20% from peak. So we have seen the rents drop by a lot due to the fact that the landlords built all these apartments over the last three years and continue to build them now. I mean, folks, just these apartments are everywhere when you walk around a city like Nashville. I mean, you can't turn around without seeing one of these mid-rise buildings. And as this video goes along, I'm gonna give you guys some tips if you're a renter out there about how to find the best deals, because even though these landlords are now saying that the demand is back, they're still giving some generous concessions and discounts on rent. They're still cutting rent in a lot of markets. So don't be too discouraged. I'm gonna show you guys at the end of this video how to negotiate a good discount on your rent. But first I wanna talk about a subject that's kinda confusing me, right? And it's the fact that we should be seeing this rental demand go down this year in 2025 because one of the biggest stories in the economy right now is the fact that immigration is plummeting. Immigration has collapsed by 95%. Additionally, the number of H-1B visas being issued are declining as well as the number of student visas, down anywhere from 20 to 40% year to date. And maybe these landlords who are celebrating this big surge in absorption in 2024 and 2025 might need to be nervous about what's coming around the corner. Another thing to think about with apartment demand is the job market for recent college graduates because one of the biggest cohorts that ends up leasing apartments in places like this are recently graduated college students. You know, you graduate college and then you go out and get your first job and then you get your first apartment either on your own or you get a roommate and you have fun in the city. However, the job market for college graduates right now is not very good. The recent graduate college unemployment rate has gone up over the last two years and we keep hearing all these stories about recent college graduates not being able to find jobs. The rumor is AI is starting to take away some of these jobs at the entry level from college graduates. Now, one market where the rents are really dropping, even though the demand levels are decent, the rents are dropping a lot in this market is Florida. Florida rents are going down by a lot. According to RealPage, rents are down anywhere from two to 8% year over year across most Florida markets. Now, the markets in Florida where rents are down the most, according to RealPage, are Naples where they're down 7.5% year over year and Cape Coral where they're down 6.6% year over year. Additionally, rent cuts were four to 5% in Crestview in Northport, Florida and in Jacksonville in Orlando, rents were down 2.5% year over year. But again, something is confusing me and that's when I dig further into the data from RealPage, everyone. And you should be paying attention to this because we're getting these conflicting signals about what's going on in the rental market. The one thing that really confused me was what's going on in Miami, Florida, everyone. In Miami, Florida, occupancy rates are going up. Miami occupancy rates are at 96%, which is the highest of any Florida market. And this is really the one that perplexes me the most because Miami's renter population is over 50% foreign born. In fact, Miami's population is 54% foreign born. And Miami basically receives more immigration than any other city in the US. So if immigration is plummeting, you would think at some point that Miami's rental market would be negatively impacted. But here's the interesting thing, everyone, about immigration. And it's the fact that there's a lag between when people come to the US and then when they start getting their own apartment. And that lag can last years. And I believe what we're seeing today in the apartment market in terms of higher absorption and higher demand than expected is still due to the big surge in immigration we saw in the US in 2021, 2022, 2023, and 2024. According to the US Census Bureau, almost all the population growth in the US in 2024 came from international immigration. We set a record for population growth, international immigration in 2024. It was also really high in 2023. And when people come into the country, they don't immediately get their own apartment. Often they stay with friends or family and try to find a job, then try to get a work permit, then get their own apartment. Suggesting that the plummeting immigration levels we're seeing now are probably gonna have an impact on the rental market sometime in 2026. And that if you're a landlord out there celebrating the seemingly resilient demand, you should understand that at some point that's likely to flip into reverse. And if that demand does flip into reverse, we could see rents get cut by more in certain markets. Maybe rents will stabilize for the next six months. Maybe they'll go up in certain markets and maybe they'll start dropping again in 2026. And a factor that's really gonna affect where rent goes up and goes down is affordability. And one metric we track here at ReVenture in terms of affordability is really gonna be a helpful one for you if you're a prospective renter or even if you're an investor. You need to understand these data points on affordability. And we have a metric called rent to income ratio. It takes the typical apartment rent in a market, annualizes it and divides it by the median income. And the lower the rent to income ratio, the more affordable it is for you to rent in that market. And let's just go through this one by one because I want you guys to understand where the most affordable places are to rent. So if you are someone who cares about affordability, maybe that's a city you could move to, especially if you have a remote job. Number one, most affordable market to rent, Des Moines, Iowa. Rent is 18.5% of gross median income. That's the most affordable market for any larger metro. Number two, Wichita, Kansas. Rent is 19.7% of median income. Number three, Huntsville, Alabama. Number four, Omaha, Nebraska. Number five, Ogden, Utah. Number six, Austin, Texas, everyone. Rents in Austin have gone down so much that it's the sixth most affordable market, which is pretty impressive. Austin, I think, is a great city actually to move to if you're someone who recently graduated college or you're someone who just is looking for more affordable rent relative to maybe what you make. Austin is a good place to do that. Minneapolis, Minnesota, Lancaster, PA, St. Louis, Missouri, and then Raleigh, North Carolina rounds out the top 10 most affordable markets for rent relative to income. And the good thing about those markets if you're an investor is that more affordable rent to income means that you actually have more stability and more room to increase rent in the future. If the average renter is only paying 18 to 20% of their income on rent, they're probably not gonna freak out if you try to increase their rent 5%. Conversely, if you buy in a market as a landlord where the rent to income ratio is 44% or 40%, you don't have nearly as much room to increase rent in the future because the tenants there are just completely tapped out. And sure enough, there are some markets in the US where renters are having to spend more than 40% of their income on rent. Think about that, everyone. In New York, the rent to income ratio is 43.6%. In Miami, it's 42.3%. In Port St. Lucie, it's 41.7%. How are people even affording to live in those cities or even in Los Angeles? Rent to income, 37.9. In San Diego, rent to income ratio of 34.7. In Tampa, rent to income ratio is 34.4. So I know a lot of people out there are struggling to pay the rent. And I know a lot of people in Florida in particular are struggling to pay the rent. I lived there for a year. I saw how high the rents were. They did start to go down when I was there, but they're still really expensive. And the message I have for some of you guys, if you can afford it, if you can afford to move, if you have a job that allows you to move, consider some more affordable cities because it's really hard to save money and set yourself up for buying a house if you're renting in a market where you're paying 35% of your gross income to rent. I mean, that's just setting you behind the eight ball. I'm thinking of all the people in New York City right now who can't even get by, who basically have no money saved by the time they're 36, 37 years old because they've just been spending it on rent the whole time. If you are someone who does care about your financial future, you would probably want to consider markets with a more affordable rent to income ratio. You can even use ReVenture app to zoom in into zip codes that have the most affordable rents relative to income. That data is available under a premium plan. Now, this is kind of funny, everyone. So when I record these videos, I tend to just like walk and I don't really have like a map that I walk. I usually have a place where I start. Like I started showing you guys that apartment building in the beginning, but I've walked probably like a mile now into downtown Nashville. So I have to start walking back to where my car is. We still got some stuff to cover in this video. So don't go anywhere yet. But sometimes what happens is like, I'll actually like forget where I parked my car and I'll film a video and I'll just be walking around for like 30 minutes trying to find where I parked my car. Luckily, Google now tells you where you parked your car, which is also a little creepy that they know where you parked your car. But sometimes I'm using that to find my car. I'm back in Nashville. The affordability for rents in Nashville is about middle of the pack. They of course had all these new buildings and all this new construction all around us. What they do in Nashville, everyone, is they do something called concessions. Concessions are everywhere in Nashville. What a concession is, is free rent. So they'll say, oh, two bedroom is 2,900 a month. But then they'll say, we'll give you two months free on a 14 month lease, which would be something like a 14 and a half percent rental discount, which is a pretty good deal. 14 and a half percent rental discount. If you amortize it, they would bring that 2,900 a month down to something like 2,400 a month, which is a much more reasonable net rent. And so while the rents in Nashville are expensive on a face value basis, pretty much every building still downtown is giving two months free, which is really interesting to me. The occupancy rates here have improved significantly from the last time I was here. When I was last here in Nashville, a lot of these buildings were like 40% vacant. Now they're only like 10% vacant, but they're still all having to give two months free rent because pretty much everyone in the market is now used to two months free rent. So you have these buildings now in Nashville that are 95% leased, but still giving two months free, which is just really kind of interesting. It suggests that the net rent in the market is actually lower than what the face value rent is because the median wages here in Nashville are around 85,000 a year. So 85,000 a year, say someone wants to be below 30% rent to income, you can really only charge what? Probably 2,000 a month. Now, as far as like, again, who's living in these buildings? Everyone, we talked about the immigration situation, how we're still likely seeing the overhang of all the surge in immigration from a couple years ago, still filtering through the apartment market. We talked about recent college grads struggling to find jobs. I can't imagine that they're jumping into the apartment market full steam without a job. I suspect that's a weaker figure on absorption. However, I think probably the biggest area that might be helping the apartment market right now is the fact that the single family home buyer demand is so low. So the number of people buying houses in the US is literally at the lowest level in 30 years. Pending sales, existing sales, mortgage applications, it's all in the tank. The housing market's like in a depression in terms of buyer demand. Not a lot of people know that, but it is. And so you're having a lot of people, I think, maybe who sold their homes at the peak of the bubble a couple years ago and who are electing to rent because they know that the housing market's in a bubble. So I think, you know, in Tennessee, you really shouldn't beep your horn like that. And you're getting more and more actually like people who maybe are over the age of 50 renting because they sold their house, pocketed the cash, and are just waiting to buy. So I think that's another thing that could be kind of, call it artificially stimulating the renter demand. I think ultimately what we'll see everyone over the next year is we'll see the rental market stabilize over the next six months. We'll see rent growth maybe start to pick up a bit. But I think in 2026, we're gonna see some issues develop again for the rental market because the immigration tailwind is gonna turn into a headwind. And eventually we'll see mortgage rates come down and home prices drop further. There'll be some more buyers entering the market to buy homes, which will likely reduce some of the renter demand as well. So I don't think this story is over on rents. I think we could see still more downside on rents. And if you are a prospective renter, home buyer, or investor, make sure to go to www.reventure.app to access rental market data down to your zip code. In particular, that rent to income ratio is a really important metric to look at if you care about affordability. Also, if you're an investor, you're gonna wanna check out our cap rate data. We have cap rate data for the 500 biggest metro areas and their associated counties and zip codes. The higher the cap rate, the higher the return. Higher cap rate markets, I think are gonna perform better in the long run. There's some high cap rate markets right now that not a lot of people are paying attention to where you can get above a 7% or 8% cap rate and ultimately get some excess cash flow and maybe some future appreciation potential in the future. So go to www.reventure.app. If you're a renter or a home buyer or an investor, sign up for our premium plan, access rent to income and cap rate under investor metrics.