Chicago Area Rental Market Worst In U.S.: Study

MCHENRY COUNTY, IL — From putting down several months' rent to competing with dozens of hopeful renters, securing a rental in suburban Chicago has become harder than ever, local realtors and renters told Patch.

In fact, the suburban Chicago rental market has become the "hottest" in the nation, according to a recent study by RentCafe. According to the study, for each available apartment in suburban Chicago, 16 hopeful renters are applying, on average, for the dwelling.

Dawn Bremer, a real estate broker for Keller Williams, shares what she is seeing at the ground level here.

"Finding the right house before the other 100 people competing for it can be tough. Credit scores play a big role, and some people are offering several months of rent upfront to work around those credit challenges," Bremer said.

In suburban Chicago, vacant units are rented out within 33 days, which is about a week faster than the national average, according to the RentCafe study. In McHenry County, Bremer said she is seeing rentals snatched up even faster, filling within five days or less.

The rise in demand and drop in supply means landlords can raise rent and renters need to scramble to secure a place. In the McHenry area, the cost for rent is up about 15 percent in the past five years, Bremer said.

"Higher interest rates mean fewer people are buying homes, so more are renting, which is pushing up demand. As a result, rents are climbing as landlords try to keep up with the increased costs and the growing competition for available units," Bremer said.

According to the RentCafe study, the occupancy rate for rentals in suburban Chicago has spiked to 95.6 percent during the peak rental season. And more tenants are deciding not to move than in the past, with nearly 70 percent re-signing their leases.

The RentCafe used its Rental Competitiveness Index (RCI) and these metrics to gauge U.S. rental markets: average days vacant, prospective renters per vacant unit, occupancy and lease renewal rates, and the share of newly constructed units.

Local renters are "feeling the squeeze" as their wages are not keeping pace with the rise in rental costs. Inflation coupled with a lack of inventory is making for a "tricky situation."

"Right now, one of the biggest challenges for affordability in McHenry’s rental market is the rising rent prices. With fewer homes for sale, more people are renting, which has driven up demand and, in turn, rent prices," Bremer said. "On top of that, wages just haven’t kept up with these price hikes, making it tough for many to find something affordable. Plus, landlords are facing their own higher costs for maintenance and property taxes, and unfortunately, that often gets passed down to renters. It’s a tough situation for a lot of people right now."

Help us with our reporting. We are looking to share more stories about the current housing market, and economy, in suburban Chicago. Share your input on stories you'd like to see us cover.