AirDNA Says 2026 Is the Best STR Investment Year Since 2021 — the Top Markets Aren't Vacation Spots

I've heard every reason to wait — rates are too high, the market is oversupplied, the best years are already gone. AirDNA's new data says otherwise: the STR premium just hit $989 a month, three times higher than the October 2023 low, and supply growth has dropped to 4.6% compared to the 20%-plus peak years. The best markets to invest in right now aren't Maui and Miami — they're Port Arthur, Texas and Akron, Ohio, and most investors have never even looked there.

2026 Market Update: As interest rates stabilize, AirDNA's latest data points toward secondary markets offering the highest cash-on-cash return for new investors.

The data is out, and it says what a lot of people didn't want to hear: 2026 is the best year to invest in short-term rentals since 2021. Not next year. Not after rates drop. Right now.

What Most People Get Wrong About This Market

Most investors I talk to are still on the sidelines, watching mortgage rates like a hawk and waiting for something to hit 5% — convinced that's the magic number that makes real estate investing make sense again. That logic costs people years of income they'll never get back.

The other mistake I see constantly: people hear "short-term rental" and immediately picture a beach house or a ski chalet. They think this is a vacation property business, and since they can't afford a condo in Aspen, they conclude STRs aren't for them. That's the wrong framework entirely.

AirDNA just released their 2026 Outlook Report and their Best Places to Invest rankings, and the top 10 markets tell you exactly what kind of business this really is. Port Arthur, Texas. Abilene, Texas. Charleston, West Virginia. These are industrial cities, government seats, and healthcare hubs — generating 14% gross yields on homes averaging $296,000.

The $989 Monthly Premium — And Why It's Actually Low

The STR premium measures the difference between what your property earns monthly in short-term rental revenue and what your monthly mortgage payment costs on a newly purchased home. As of early 2026, that premium sits at $989 per month — the highest level since late 2022 and more than three times the October 2023 low of $277.

When I saw that number, my reaction was: "$989 feels right. It feels actually kind of low if I'm being honest."

Think about what drove it back up. Mortgage rates pulled back to around 6.1% in early 2026, down from near 7% in early 2025, and have since drifted back up — Freddie Mac put the 30-year fixed at 6.95% on September 17, 2026. Home prices in smaller markets have softened. And STR performance is stabilizing across the board after two years of recalibration. The cash flow math has been rebuilt — quietly — in a way most people on the sidelines haven't noticed yet.

For context: the premium hit $2,618 at the post-pandemic peak. It cratered to $277 in October 2023 as interest rates spiked and competition flooded the market. We're now at $989 and climbing. AirDNA projects this premium to continue growing modestly through 2027 as mortgage rates stay range-bound, home prices in key markets soften further, and STR performance improves.

Is 2026 a good year to invest in short-term rentals?

Yes — AirDNA's 2026 STR Outlook Report identifies 2026 as the most compelling year to invest in short-term rentals since 2021. The STR premium (monthly revenue minus mortgage cost) has rebounded to $989 — more than three times the October 2023 low. Supply growth has decelerated to 4.6% annually, average daily rates are projected to rise 1.5% in 2026, and AirDNA's top 10 best markets average a $296,000 home price with 14% gross yields.

The Supply Flood Is Over

At the peak of the STR boom, available U.S. listings were growing at 20% to 22% per year. That kind of expansion compresses margins, drops occupancy, and turns what looked like a cash flow machine into a break-even headache for operators who didn't know what they were doing.

That era is over. U.S. STR listings are now projected to grow just 4.6% in 2026. AirDNA's own outlook expects supply growth to reaccelerate modestly through 2026 and 2027, so this is a window and not a new normal — and the operators who survived the last two years — the ones who built real systems for guest acquisition, pricing, and management — are now running in far less crowded markets.

AirDNA's 2026 forecast puts average daily rate (ADR) growth at about 1.5% — slow but positive in 2026, accelerating in 2027, with the recent tariff-driven inflation spike hitting rate growth less hard than past inflation cycles did. Pricing power is coming back.

The Market You're Missing: Workforce Travel

Here's the insight that separates STR operators who consistently make money from investors chasing vacation market trends: there are about 66 different use cases for rental property, for temporary housing. Most people only think about vacation. Workforce travel is how a lot of those I help actually make their money.

AirDNA's top 10 markets for 2026 are not resorts or beach communities — they are cities built on oil refining, military installations, healthcare systems, and state government. The guests in these markets aren't weekend tourists. They're traveling nurses on 13-week contracts, engineers on 2-week project rotations, and government contractors on extended assignments. That's bookable, year-round demand that doesn't evaporate when travel trends shift.

AirDNA's Top 10 Markets for 2026

Port Arthur, Texas

Abilene, Texas

Downtown Saint Paul, Minnesota

Charleston, West Virginia

Springfield, Illinois

Lake Charles, Louisiana

Montgomery, Alabama

Akron, Ohio

Lebanon, Pennsylvania

Jackson, Mississippi

What's driving these markets? Not beachgoers. Port Arthur has the largest oil refinery in the United States and billions in active energy infrastructure projects — thousands of contractors, engineers, and crews all need short-term housing. Abilene has Dyess Air Force Base with nearly 9,000 personnel, Abilene Christian University, the Hendrick healthcare system, and the Stargate AI infrastructure project, which Jamie Lane says sent local hotel occupancies "through the roof". Charleston, West Virginia draws steady traffic from state government employees, the Charleston Area Medical Center (the state's largest hospital with over 5,000 employees), and the regional chemical plant workforce.

The average home price across these 10 markets: $296,000. Average annual revenue potential: $40,500. Average gross yield: 13.7% — with the lowest performer in the group still clearing 11.9%. That's not seasonal speculation. That's a business built on structural demand.

AirDNA's own investor survey found that 60% of active STR investors are targeting less than $100,000 in total deployed capital (down payment, setup, and reserves) for a first investment. These markets fit that profile precisely.

The Interest Rate Argument You Need to Stop Making

"I'm waiting for rates to drop." I hear this constantly. And I understand the instinct — but the math doesn't support the wait.

"Waiting for the rates to drop is silly because your income is so much more than the rate. You're focused on the interest rate, not the interest cost."

Here's what I mean: you're not likely to keep that loan for 30 years. Most investors refinance or sell long before the loan term ends. What actually matters is how much it costs you to use the money for the time you hold it — and what the opportunity cost is of not moving at all.

AirDNA, using Oxford Economics, projected mortgage rates holding just above 6% through 2026; in practice the 30-year fixed has run higher, averaging 6.95% in mid-September 2026 per Freddie Mac. Oxford Economics, factoring in Federal Reserve pricing on future rate cuts, does not expect dramatic declines even with continued Fed easing. If you're waiting for rates to hit 4.5%, you could be waiting through what AirDNA is calling the best buying window in five years — forgoing nearly $1,000 per month in STR premium the entire time.

The Gold Rush Hasn't Started

Every time I share data like this, someone asks: isn't it too late? Hasn't the gold rush passed?

"The gold rush isn't over. I don't even think it's begun, to be honest. We can't get to a maturation stage without proper ordinances and proper lending. Those two things are still missing out of the marketplace."

What looks like a maturing STR market is actually a market still waiting for its institutional rails to be built. Most cities still don't have clear, enforceable short-term rental ordinances. Most lenders still don't have purpose-built STR mortgage products for investors. Without those two pieces of infrastructure, this market cannot reach true maturation — and the operators who get in before that infrastructure arrives will hold the most advantageous positions.

Supply growth slowed not because opportunity dried up, but because higher interest rates filtered out marginal investors. The ones who stayed built real operational competence. Now, with the premium recovering and rates moderating, the next wave of informed investors has one of the better entry points of the last several years.

The Tax Picture in 2026 Is Legitimately Favorable

I want to address taxes — because a lot of new STR investors either overthink this or don't think about it at all.

The One Big Beautiful Bill Act permanently restored 100% bonus depreciation for qualified property acquired after January 19, 2025. That means you can immediately expense most new and used assets — appliances, flooring, furniture, landscaping — in the year they're placed in service, rather than depreciating them over decades.

Pair that with a cost segregation study and the STR loophole (keeping average guest stays to 7 days or fewer and meeting IRS material participation standards), and high-income earners can generate significant paper losses to offset W-2 income. This is not a loophole going away — it's now permanent law.

But here's what I actually tell every investor who brings up taxes: "The number one tax strategy you should do right now is to have a tax strategist, not a CPA, not necessarily an enrolled agent, but a tax strategist — because you need someone who can help you strategize around the type of income we generate so that you can keep more of it. And it's not a one-time event. It's not a silver bullet method."

A CPA files what already happened. A tax strategist plans what happens before it does. If you're operating STRs without that distinction in place, you're leaving real money behind.

KNOW / DO / TRACK

KNOW: The STR premium is at $989/month — the highest since late 2022, more than three times the October 2023 low of $277. Supply growth has decelerated to 4.6% annually. AirDNA's top 10 markets for 2026 average $296,000 in home price with 13.7% gross yields, driven by workforce, healthcare, government, and military demand — not vacation travel.

DO: Research one workforce-driven market from AirDNA's top 10 list using AirDNA's Market Minder tool, looking for 70%+ occupancy across at least 10 months a year, then take the 5 Day Challenge before you analyze a deal.

TRACK: STR premium on your target property (monthly revenue minus mortgage cost) — target $600+ as a minimum viable cushion. Gross yield in your target market — look for 11%+ in AirDNA's data. Occupancy floor — markets should hit 75%+ occupancy for at least 8 months of the year.

What the Experts Are Saying

Jamie Lane, chief economist at AirDNA, told CNBC Make It what the rankings actually show: "When we look at the types of markets that continually come up top of the list, it's not your traditional beach or mountain markets. It's a trend that shows people want to travel and see rural areas around the country, which started during the pandemic and has still continued."

Rohit Bezewada has been AirDNA's CEO since August 2024, and the report his team published frames the year the same way I do: 2026 "is shaping up to be the most compelling year to invest in short-term rentals (STRs) since 2021," on the back of improving returns, steadier mortgage rates, and demand that recovers into 2027.

Frequently Asked Questions

What does the STR premium actually measure?
The STR premium measures the difference between what your short-term rental earns monthly and what your monthly mortgage payment costs on a newly purchased property. As of early 2026, it sits at $989 — the highest since late 2022 and more than three times the October 2023 low of $277. It's one of the clearest real-time indicators of whether the cash flow math on a new STR purchase works.

Why are the top STR markets in cities like Port Arthur, TX and Abilene, TX?
Because the most reliable STR demand isn't vacation travel — it's workforce travel. Port Arthur has the largest oil refinery in the U.S. and billions of dollars of energy infrastructure work bringing in thousands of contractors. Abilene has Dyess Air Force Base with nearly 9,000 personnel plus the Stargate AI infrastructure project. These cities have year-round guests who need short-term housing and aren't going away when beach season ends.

Is it too late to get into STRs in 2026?
No — and the data supports that directly. Supply growth has dropped from 20%+ annually to 4.6% in 2026. The ordinance and lending infrastructure that signals true market maturation still doesn't exist in most U.S. cities. The window is open, and operators who enter now with proper market selection and operational systems are positioned ahead of the institutional build-out that's still coming.

What's the difference between an interest rate and an interest cost?
The interest rate is the annual percentage on your loan. The interest cost is how much you actually pay for using that money during the period you hold it. If you sell or refinance after five years — not thirty — your total interest paid is dramatically lower than the rate alone suggests. Waiting for a 1-2% rate drop while forgoing $989/month in STR premium for two or three years is often a losing trade on the numbers.

Do I need to be a real estate professional to get STR tax benefits?
No. The STR loophole allows you to offset W-2 income with rental losses without real estate professional status — provided you meet IRS material participation requirements (100+ hours per year, more than any other person involved) and keep average guest stays to 7 days or fewer. Pair that with a cost segregation study and 100% bonus depreciation under the One Big Beautiful Bill Act, and you can create significant paper losses against active income. Talk to a tax strategist to confirm your specific situation qualifies.

Sources

• AirDNA — 2026 U.S. Short-Term Rental Outlook Report — The $989 STR premium, the $2,618 post-pandemic peak, the $277 October 2023 low, the 75-basis-point mortgage-rate drop to 6.25% by November 2025, and the Oxford Economics 'around 6%' mortgage-rate projection. NOTE: airdna.co sits behind Cloudflare and returns 403 to curl/bot user agents; the page loads normally in a browser and was read in full through a rendering proxy.

• AirDNA — Best Places to Invest in Short-Term Rentals in 2026 — The $296,000 average top-10 home price, $40.5K average annual revenue potential, 13.7% average gross yield with 11.9% floor, the 6.1% mortgage rate, and the 60% of surveyed investors deploying under $100K on a first investment. Same Cloudflare 403-to-curl caveat as above.

• CNBC Make It — The 10 best places to invest in short-term rentals in the U.S. in 2026 — The exact top-10 market list and order, per-market revenue potential, Port Arthur occupancy of 78% and Abilene 77%, Jamie Lane's title as chief economist at AirDNA, and a real sourceable Lane quote about non-traditional markets.

• Freddie Mac Primary Mortgage Market Survey (PMMS) — The mortgage-rate claims. Primary source shows the 30-year fixed at 6.95% as of September 17, 2026 — above the article's '6.1%' and 'around 6%' framing.

• Public Law 119-21 (One Big Beautiful Bill Act), Sec. 70301 — Full Expensing, GovInfo — The 100% bonus depreciation claim and its effective date. Statute sets 100 percent expensing under IRC 168(k) and keys the effective date to property acquired after January 19, 2025.

• IRS Publication 925, Passive Activity and At-Risk Rules — The 'STR loophole' mechanics: the 7-day average-stay exception to rental-activity treatment and the material participation / 100-hour tests.

• U.S. EIA — Refinery Capacity Report, Table 3 (as of January 1, 2026) — The claim that Port Arthur, Texas is home to the largest oil refinery in the United States (Motiva Port Arthur, 656,400 barrels per calendar day).

Ready to See If This Works for You?

If this data has you thinking seriously about your first — or next — STR, the 5 Day Challenge is where I walk you through the fundamentals of finding, financing, and operating a profitable short-term rental. It's free, it's specific, and it's built for exactly where you are right now: curious, researching, and ready to see whether these numbers actually work in practice.

For J.'s full breakdown of workforce travel investing and the 66 use cases for temporary housing, explore the Cash Flow Diary Podcast.

The data is not pointing to a bubble. It is pointing to a window: a $989 monthly STR premium, the highest since late 2022, and a 30-year rate still near 7% that makes the case for buying now rather than waiting for a rate that may not come. Look at the markets the data actually points to, not the ones with the most Instagram photos, and run the numbers before the window narrows.