Renters Now Able to Afford More, Report Says
CoreLogic recently released its Rental Applicant Risk report for the first quarter of 2013, and it looks promising for consumers on the hunt for a place to rent this year. The report provides market-based research intended to shed some light on the housing market specifically for renters. Their Renter Applicant Risk index evaluates applicants’ credit quality and their risk of default, and the RAR index for the first quarter of 2013 is at a healthy 104, up 2 points from last year and up from 99 at this time in 2011.
A RAR index above 100 indicates applicants have better credit, and are better able to meet their lease obligations. “As the economy continues to grow slowly, conditions appear cautiously optimistic for continued improvement in renter applicant qualifications in the year ahead,” said CoreLogic SafeRent senior director Jay Harris. “During this relatively upbeat period, renter trends are pointing toward increased confidence among property owners and applicants.”
While this shows that the overall credit quality of prospective renters in the U.S. improved in the past year, renter traffic went down across all property classes. Applications for properties with monthly rent of over $1,100 went down by 5.4 percent, the largest of the three classes. However, while activity dropped, renters’ income went up ever so slightly, as did rent-to-income ratios, which indicates that while tenants can afford more, they’re also spending a bigger proportion of their budget for higher quality housing.
Rent amounts were also down in the first quarter at the low (less than $750) and high (over $1,100) ends of the spectrum, while remaining essentially stagnant in the middle.
The Northeast and Western regions of the country carry the highest regional index values in the country, though all around, the situation for American renters has improved. Trends indicate that if growth follows the same pattern as it has, 2013 could be a great time to sign a lease.
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