Rents have risen almost as quickly as home prices in select markets across the country over the past two years. Low supply and red-hot demand have created the perfect storm for double-digit year-over-year rental growth.

Reports are starting to trickle in that indicate that rental growth is slowing across the board, but there are several markets where rents are still exploding. Here's a closer look at three rental markets that are still seeing incredible growth despite the changing real estate market.

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Image source: Getty Images.

1. Orlando, Florida 

Estimates vary, but year-over-year rental growth in Orlando is between 18% to 20% as of June 2022. The city's diverse industries, which include tourism, manufacturing, biotech, aerospace, defense, and simulation, mean there are a ton of high-quality job opportunities. In 2021, Orlando was considered the second-fastest growing city in the United States.

It's surprising to see that rental rates are continuing to grow so quickly for the city, given it's more affordable to buy than rent. The fact the city has only 1.43 months of inventory as of June could be a reason many are still choosing to rent.

One thing real estate investors should be aware of is the commissioner's discussion of rent control. If passed by the county, it will be put on the ballot in November and could greatly impact the rental growth of the area moving forward.

2. Tampa, Florida

Tampa has arguably been the fastest-growing rental market in the country over the past two years. The U.S. multifamily matrix, as measured by Yardi Matrix, notes an over 40% increase in rents for Tampa over the last two years, with May 2022 year-over-year rental growth being over 20%. 

Home to the second-largest port in Florida, and now a budding tourist destination, Tampa is rooted in a diverse economy, with healthcare, technology, and construction backing its incredible growth. Tampa is seeing a growing number of professionals move from the Northeast and South Florida to get a taste of Gulf Coast living, bringing with it hefty demand for rental housing.

Like Orlando, it's more affordable to buy here than rent, so there's a chance when housing supply catches up with demand, rental growth will slow back to more normalized levels.

3. Miami

Miami is second behind Tampa in terms of fastest-growing rental markets over the past few years. This beachside city in south Florida hovers above the 40% mark for rental growth, with June 2022 year-over-year growth between 16% to 24%, depending on estimate sources.

The city brings visitors from across the globe to work, play, and live. It's also tied heavily to the financial industry, with diverse jobs in tourism and hospitality, cruise lines, and manufacturing. 

The Sun Belt is undeniably leading nationwide rent growth, with Florida and Texas disproportionately winning the rent growth race. However, other markets, like New York City; Seattle; Rochester, New York; Tucson, Arizona; San Diego; Charlotte, North Carolina; and several others are seeing year-over-year rent growth of at least 20%.

According to Yardi Matrix for national rent growth, 23 of the 30 top markets with positive rent growth were Sun Belt cities. A recent CoStar Group report seconds that trend, with 16 of the top 20 markets for year-over-year rent growth being Sun Belt cities.

In conclusion: If you're looking for smoking-hot rental markets that show no signs of stopping soon, stick to the South.