The Providence capital of Rhode Island has surpassed both New York and San Francisco to take the top spot on Zillow’s ranking of the hottest rental markets. However, the recent study showed that there is intense competition for tenants in these markets.
Demand for rental properties continues to outpace supply in Zillow’s most competitive rental cities. There is more competition for the few available homes since many renters are driven to these locations by the amenities, employment possibilities, or desire to remain near family. Even though 2024 saw the largest increase in new construction in decades, a large portion of that growth did not reach coastal California or the Northeast, which contributed to particularly difficult conditions there. Demand is still high in less competitive markets, but they have been more successful in increasing the supply of new homes.
Zillow’s Top 10 Hottest Rental Markets for Summer 2026:
| Hottest market ranking | Metro area | Annual rent growth | Share of concessions | Vacancy rate forecast | Zillow Observed Rent Index (ZORI) |
| 1 | Providence, RI | 5% | 12.9% | 5.1% | $2,154 |
| 2 | New York | 4.5% | 17.8% | 4.3% | $3,406 |
| 3 | San Francisco | 5.4% | 33.2% | 4.3% | $3,206 |
| 4 | Hartford, CT | 3.9% | 22.3% | 4.3% | $1,940 |
| 5 | Los Angeles | 2.4% | 29.4% | 4.5% | $2,892 |
| 6 | Chicago | 5.7% | 22.4% | 5.3% | $2,219 |
| 7 | Boston | 2.5% | 29.7% | 6.3% | $3,184 |
| 8 | Milwaukee | 4.1% | 27.5% | 3.8% | $1,540 |
| 9 | Virginia Beach, VA | 4.8% | 28.8% | 4.1% | $1,843 |
| 10 | San Jose, CA | 4.1% | 40.3% | 4.9% | $3,534 |
In hot markets, property managers never provide concessions like free rent or reduced fees, vacancies are low, and rates rise quickly. In contrast, rent growth has been restrained in Sun Belt locations like Austin, Texas, Tampa, FL, and Phoenix due to a surge in new rental development.
Examining the Top Rankings by Region
No. 1 — Providence, RI:
The spotlight is nothing new to the popular coastal metro of Providence. Known as the “Creative Capital,” it came in at number four on Zillow’s list of the top for-sale areas earlier this year. Rentals have benefited directly from this trend. Renters find limited leeway to bargain because just 12.9% of property managers provide concessions, which is the lowest percentage in the top 10. Rents have increased by 5% annually. Renters must make approximately $86,000 annually to comfortably afford the average monthly rent of $2,154.
No. 2 — New York, “The Big Apple”:
With 4.5% annual rent growth and an average monthly rent of $3,406—nearly $1,500 more than the average rent in the United States—the larger metro, long considered one of the most competitive rental markets in the nation, continues to draw high demand. Conditions are significantly more severe inside the city. The median asking rent increased to $4,120, the highest in StreetEasy’s history, while inventory in all five boroughs decreased by 7% from a year before. For the longest period on record, Manhattan’s inventory has decreased for 26 straight months.
No. 3 — San Francisco:
The city has long been associated with innovation and the tech sector, and its job market attracts a constant flow of tenants. Only 4.3% of apartments are expected to remain unoccupied over the next year, compared to 7.3% nationwide, and rent growth is 5.4% yearly, the second-highest rate on the list.
Overall, rents in the hottest markets are rising because new rental construction hasn’t kept up with demand in some areas of the nation. Although only time can tell, while the most competitive rental markets in the country are found in coastal California and the Northeast, that may not be the case in the coming months or years.
To read the full report, click here.
