DAYTON — The Midwest has become the hottest rental market in the United States, overtaking coastal regions that previously dominated the housing sector.
In Ohio, strong demand in the Dayton area is driving regional growth and keeping rental property performance high.
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According to data from Yardi Systems and RentCafe, Dayton now ranks as the 21st best small rental market in the country. The area currently boasts a 94% occupancy rate across all residential units, alongside a 67% lease renewal rate.
Coastal communities, particularly along the West Coast, previously led the national rental market.
However, an influx of employment opportunities, a talented workforce, and relatively affordable real estate have pushed the Midwest to the top.
Doug Ressler is the manager of business intelligence at Yardi Systems. He attributed the region’s strong rental demand to major educational institutions and expanding sectors such as aerospace.
“You have major universities like Purdue, the Ohio State University, you know, Chicago, those types of folks,” Ressler said. “And, you also have a lot of aerospace, like in the, has aerospace that is expanding right now. So, developers see that. And, with that, you’re seeing a healthy influx of absorption of product.”
While housing inventory and new construction have been issues for years in Dayton, developers are actively building more units. Many prospective homebuyers remain priced out of the housing market, keeping rental demand elevated.
Developers are responding by increasing construction of smaller floor plans, including studios and one-bedroom units.
Ressler noted that adjusting the unit mix helps renters access amenities while staying within budget.
“What you see is that even in highly amenities, you’re seeing a lot of one-, two-, 3000 type, percentages in terms of unit mix, which is advantageous so you can live in a very monetized product, but one that will still meet your budget,” Ressler said.
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