Investments

Morningstar: Single-family rental securitization delinquencies mainly below 1%

With only one exception

For rent sign house

It may be a relatively new market, but it’s doing pretty well despite its infancy.

The delinquency rate across nearly every single single-family rental securitization is below 1%, according to a Morningstar Credit Ratings report on performance in the sector.

Only American Rental Properties 2014 deal is above that 1% threshold with delinquent payments at 2.3%, up from 1.9% the previous month. Delinquency is broadly defined as a month or more behind on rent. Each issuer uses its own criteria for classifying a tenant as delinquent.

“However, the vacancy rate for ARP 2014-SFR1 continues to improve and stands at 8%, down from 8.3% in March and its peak of 10% in February,” the report states. “With fewer lease expirations for ARP 2014-SFR1 anticipated in the coming months, this metric may continue to improve.”

In general, delinquency rates continued to fall in April, the report states.

In another bright spot for the market, delinquency in the American Homes 4 Rent deals continue to improve as performance moves further away from a reporting system conversion at the end of 2014 that temporarily resulted in delays in tenant payment information. 

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