Rental conditions improve in Q3

Multifamily rental conditions strengthened last quarter.

The multifamily rental market improved for both property management companies and tenants during the third quarter, according to a report from CoreLogic SafeRent.

Multifamily Applicant Risk, an indicator of credit quality from renters, as well as total quality of applicants, dropped two points from the second quarter. However, the figure rose two points from 12 months earlier, the report explained.

The level of older applicants rose during the quarter, as more consumers older than 50 are looking at properties. Meanwhile, the total share of young people renting declined from the same three months in 2011, as well as the previous quarter, the report noted.

Rent affordability also showed positive signs during the quarter. Income for property applicants jumped more than 1 percent year-over year, as well. However, the level of income used for rental purposes fell by more than 1 percent, to 22 percent of all earned money, according to the report.

"Lower rent-to-income ratios suggest that applicants can afford higher rents in many markets," said Jay Harris, senior director of business development for CoreLogic SafeRent. "The decreased number of single applicants indicates that renters are continuing to share the cost of rent with roommates, family and others in shared-living situations."

There were fewer applicants denied from moving into multifamily setups from property managers during the third quarter, which was a trend in the past several years, the report explained.

Harris noted further that more commercial property managers showed interest in a larger group of applicants in recent years because credit quality increased significantly from prospects. Additionally, these prospects are also making more disposable income.

At the same time, a larger portion of consumers with little credit history are entering the multifamily sector, CoreLogic said. This figure was near 30 percent of total property applicants.

Regions show differing situations
The rental situation is different throughout much of the country, as some regions scored higher MAR scores than others. The report showed that the Northeast had the highest level on the index, as it reached 113 during the third quarter, which was one lower than the level one year earlier. Additionally, the West and Midwest experienced the next-highest figures, with 108 and 101, respectively.

The report added that the South had the lowest score, as it's level of 101 was three points lower than the previous quarter, but two points higher than the same quarter in 2011.

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