Coastal California Rental Market Among the Hottest in the U.S. for Summer, Study Finds

Coastal California continues to be one of the most competitive rental markets in the country, a new study from Zillow has revealed.

According to a recent study by Zillow identifying the ‘hottest’ rental markets for summer 2026, California dominated the list with three cities among the top 10 most competitive rental markets in the U.S.

Of the three cities, two are located in Coastal California, underscoring the continued demand for housing in these major cities despite the ongoing affordability concerns.

San Francisco ranked No. 3 on the overall nationwide list, making it the highest-ranked California city. Synonymous with the technology and innovation industry, the city sees a steady supply of renters due to the high job potential in the city.

Annual rent growth in San Francisco stood at 5.4%, the second highest on Zillow’s list, with only 4.3% of rental units predicted to sit vacant over the next year, compared to 7.3% annually. The typical rent here is $3,206.

Los Angeles came next at No. 5 on the list, with the annual rent growth totaling 2.4%. Only 4.5% of units are expected to sit vacant over the next year. The typical rent is usually around $2,892.

The third California city on the list was San Jose, which secured the No. 10 rank. The city’s annual rent growth stood at 4.1%, with 4.9% of units expected to remain vacant over the next year. Rent in San Jose is typically around $3,534.

Bay Area cities are becoming increasingly popular among renters, with several cities in the region attracting interest from renters this year, a recent analysis by RentCafe has shown. Despite renter activity typically cooling by the end of the year, some cities in the Bay Area continued to see strong engagement through the last few months of 2025.

Top 10 Hottest Rental Markets

Here are the top 10 most competitive rental markets:

• Providence, RI
• New York, NY
• San Francisco, CA
• Hartford, CT
• Los Angeles, CA
• Chicago, IL
• Boston, MA
• Milwaukee, WI
• Virginia Beach, VA
• San Jose, CA

Demand Exceeds Home Availability

In all 10 cities, competition is fierce, and demand continues to surpass the number of available units, according to Zillow.

Renters are usually exploring rental homes in these cities for their amenities, job opportunities, or to stay close to their families. While this increases competition, it also results in a limited pool of available rental homes.

While new construction surged to a record high in 2024, that wave did not extend toward Northeast or Coastal California, leading to less supply of homes, according to Zillow.

While less competitive markets have been experiencing robust demand, they have been more efficient in adding new housing supply.

In these hot markets, rents rise sharply amid low vacancies, while property managers rarely offer concessions, including waived fees or free rent.

This is a stark contrast to the Sun Belt markets, such as Austin, Phoenix, and Tampa, where rent growth has mostly been under check due to a surge in new rental construction, according to Zillow.