Buckle up. We’re three months deep into 2025 and corporate relocations are undergoing significant shifts. The rental market outlook is robust in certain regions, while more mixed in others. However, there is growing uncertainty surrounding the potential impact of changing tariff policies, leaving many wondering how these shifts might affect what was previously anticipated to be strong rental demand.
For corporate housing providers, staying on top of these fast-moving trends is key to helping clients navigate an evolving landscape and meet the needs of today’s mobile workforce. If it’s your job to manage relocations for your team, you’ll want to review this to plan ahead for 2025 and beyond. Let’s take a closer look at the latest rental trends and forecasts for 2025 and 2026 by region, according to the Corporate Housing Provider’s Association (CHPA) report. We’ll also explore how these projections may be impacted by an unpredictable economy.
Regional Rental Trends: A Snapshot for 2025 & 2026
The Northeast: Steady but Growing
The Northeast is expected to experience moderate rent increases of around 3-5% in 2025 and 2026. Factors such as the resurgence in business travel, return-to-office policies, and growth in sectors like tech and biotech (e.g., Boston) and finance (e.g., New York City) are driving this trend. While the region isn’t seeing the rapid rent jumps seen elsewhere, it currently is stable and competitive, with increasing demand for short-term and long-term rentals as companies strengthen their presence.
The Midwest: Affordable with Steady Growth
The Midwest is attractive for businesses seeking cost-effective options with a solid infrastructure. Rent growth is expected to remain modest, around 1-3%. Cities like Chicago and Columbus are drawing major corporate expansions, especially in industries like manufacturing and healthcare. This affordability makes the Midwest a prime location for companies seeking budget-friendly corporate housing, though demand will steadily rise as more companies relocate to the region.
The South: The Booming Hotspot
The South is poised to lead the nation in rent growth, with an expected increase of 5-7%. Cities such as Dallas, Austin, and Miami are seeing an influx of corporate relocations, especially in tech. As more businesses establish themselves in these rapidly expanding cities, the housing market is adapting. For relocation specialists, the challenge will be balancing rising housing costs with the demand for affordable, high-quality corporate housing. The South offers strong job markets, great amenities, and dynamic business ecosystems, making it a prime destination for extended business stays.
The West: Mixed Outlook
The West presents a more mixed outlook in 2025. Cities like Los Angeles and San Francisco, long-standing business hubs, are seeing slight rent declines due to affordability issues and the migration of residents to more affordable areas. While still offering significant business opportunities, these cities are becoming less popular for extended business stays. The report suggests that, in contrast, cities like Phoenix, Denver, and Las Vegas are expecting rent growth of up to 6%. As businesses flock to these cities in search of talent and favorable climates, corporate housing demand is set to rise, however the recent government reduction have tempered these anticipated increases.
Corporate Relocations: A Key Driver of Housing Demand
Corporate relocations play a significant role in driving housing demand. Companies are increasingly moving operations to cities like St. Louis, Omaha, and Raleigh, which are known for their affordability and business-friendly policies. As more Fortune 1000 companies establish headquarters in these areas, demand for corporate housing will rise. Cities like Nashville, Indianapolis, and Charlotte are also seeing a surge in relocations meaning they will experience significant demand for corporate housing in the coming years, requiring flexible, short-term housing solutions.
American Cities for Extended Business Travel
While major cities like New York, San Francisco, Washington, D.C., Chicago, and Boston remain top business hubs, rising rental costs and business expenses are prompting a shift toward neighboring areas that offer more affordable housing. Cities such as Jersey City, Brooklyn, and Oakland are seeing an uptick in business travel bookings due to their competitive rental prices and proximity to key business districts.
Secondary cities like Nashville, Raleigh, Indianapolis, Salt Lake City, and Charlotte are emerging as attractive alternatives for business travelers. These cities combine affordability with strong job markets, making them ideal for employees on extended assignments.
Shifts in Housing Preferences & Demand
As rental prices climb in major business hubs, business travelers are increasingly looking to suburban and secondary markets for more affordable furnished housing. This trend is particularly noticeable in cities like Chicago and Miami, where demand for short-term housing is shifting to surrounding neighborhoods. Relocation specialists will need to adapt by finding flexible, affordable housing options in these growing areas.
Additionally, there’s a rising demand for flexible corporate housing solutions. More professionals are opting for serviced apartments instead of traditional leases, as they offer the flexibility and convenience needed for extended stays.
Impact of Government Reductions and Tariffs on Corporate Housing and Rental Markets
While the CHPA’s regional rental report was written mere months ago, recent changes in U.S. tariff policies along with a significant reduction in government staffing, may create ripples across the rental market, impacting the economic outlook. Here are some factors to consider:
- Reduced staffing will directly impact demand of the government’s use of corporate housing. Ancillary businesses that rely on government contracts is also expected to take a hit.
- Expected increases in manufacturing within the U.S. may offset this reduction with an increase in demand in regions where manufacturing is more prevalent.
- Some speculate that rising costs in renovation, maintenance, and materials could impact various rental markets.
- Short-term rentals, such as those on Airbnb and VRBO, may see higher nightly rates as property owners face increased expenses, though demand could rise as travelers find hotels equally expensive.
- Mid-term rentals, like corporate housing, may become more costly as providers pass on higher expenses.
- Economic uncertainty and supply chain delays could reduce both demand and availability.
- For traditional long-term rentals, rents are expected to rise due to slower new apartment construction, and lower-income renters may face challenges as affordable housing projects are delayed.
- Overall, higher home prices and mortgage rates are driving increased demand for rentals.
- Cities heavily reliant on international trade, such as Los Angeles and Miami, may see a more pronounced impact, as tariffs could disrupt local economies, shifting both housing supply and demand dynamics.
- The uncertainty of the current market may lead businesses to pause or slow spending on corporate relocations.
____________________________________________________________________________
The future of business travel is all about adaptability, and those who can navigate these shifts will be the ones delivering smoother, stress-free relocations that are on budget. If you have questions about the changes that may be ahead and how that impacts your team, let’s talk. Conversations with AvenueWest are always free.
1.800.928.1592
Global@AvenueWest.com
