While Lehigh Valley officials and developers have been trying to keep up with a chronic housing shortage, the region continues to be one of the most competitive areas in the country for those looking for an apartment or house to rent.

In its year-end review of the nation’s smaller metropolitan areas, RentCafe has determined that the Valley is the second-hottest rental market. Despite a 2.58% increase in supply over the past year, those in the market on average are competing with 14 others for each unit.

“Demand continues to surge — especially in places like Bethlehem, Allentown and Easton — as commuters, remote workers and newcomers from New Jersey and New York search for more affordable options,” RentCafe said in its report. “Adding to the pressure, local colleges — such as Lehigh University and Northampton Community College — continue to draw students, and campus housing is often packed. As such, many end up renting off-campus, competing with young professionals and families for budget-friendly apartments.”

RentCafe said about 80% of tenants renew their leases, keeping occupancy at 96.2%. A vacant unit is usually filled within 40 days.

RentCafe gives the Lehigh Valley a rental competitiveness index score of 90.6 out of 100. The national average score is 73.3. The 15 applicants per unit is the highest in the nation among small metros.

This year, the Lehigh Valley Planning Commission reviewed buildings with an average of 3.46 units through November. LVPC numbers show that renters make up about 33% of households in the Lehigh Valley. It’s a 7% increase since 2005 and a 2% increase since 2018-19.

Projects to bring new apartments include refurbishing older buildings, including 61 units at the former Wells Fargo bank in downtown Bethlehem.

Repurposing older buildings has been an option for some: Developer Nat Hyman is expanding The Bindery complex in Allentown with 20 more units while the former Cement National Bank building in Northampton is being converted into 12 units with retail space. The owner of the PPL Building in downtown Allentown plans to convert the iconic skyscraper into living space.

Other recent projects include a site in Upper Macungie Township that Fox Run Partners recently bought, which is slated to have 22 buildings holding 132 apartments just west of Trexlertown. Two projects are underway along Allentown’s riverfront — the River House at 30 E. Allen St. with 210 units, and the nearby Neuweiler Lofts, which will transform the former brewery into a mixed-use complex, with 283.

Fayetteville, Arkansas, had the highest rate among small markets with a competitiveness score of 92.4 and an occupancy rate of 96.4%. Harrisburg was in the third place with a score of 88.2 and occupancy at 95.9%.

Among the big markets in the U.S., Miami had the highest rental competitiveness index score, 92.9. The Philadelphia suburbs were seventh at 83 and northern New Jersey was 15th at 80.8.

For the national market in 2026, RentCafe expects markets to remain competitive, especially during the summer.

“While the year will likely begin on a calmer note, conditions are set to tighten quickly as demand rises and available apartments become harder to find,” RentCafe said. “The seasonal imbalance between supply and demand will follow a familiar pattern. But, this time, competition could be even tougher. By early summer, the number of renters per available unit is expected to reach 11 — the highest level in recent years.”