The CoreLogic Renter Applicant Risk Index rose two points year-over-year to an index score of 104. The rise in the index indicates improving ability to meet lease obligations among prospective apartment renters in the U.S.
The quarterly report provides market-based benchmarks for evaluating credit quality and risk of default among renters applying for apartment homes in multifamily housing units and single-family rentals.
Typically an index value above 100 indicates improved applicant credit quality and decreased lease default risk, while a value below 100 indicates declining applicant credit quality and increased lease default risk.
"It's encouraging to see better qualified applicants who are more likely to meet their lease obligations," said Jay Harris, senior director at CoreLogic SafeRent. "As the economy continues to grow slowly, conditions appear cautiously optimistic for continued improvement in renter applicant qualifications in the year ahead. During this relatively upbeat period, renter trends are pointing toward increased confidence among property owners and applicants."
CoreLogic (CLGX) tracks apartment activity by property classes to more accurately reflect market trends. National property classes include Class A: Properties with rents greater than $1,100; Class B: Properties with rents between $750 and $1,100; and Class C: Properties with rents less than $750.
Nationally, renter applicant traffic dropped slightly on a same-store basis (measuring the same properties over time). Annually, the CoreLogic index measuring applicant traffic for the same properties fell 5.4% for Class A properties. For Class B properties, the index dropped 3.7% and 4.4% for Class C properties.
Applicant incomes inched up slightly in the first quarter of 2013 across all property classes, with rent-to-income ratios following suit. Year-over-year, the average monthly applicant income for Class A properties was $4,528, a 1.4% increase. For Class B properties, the average monthly income was $2,895, up 0.2%, while Class C property applicants saw a monthly average income of $2,047, up 0.4%.
Lower-priced rentals see more significant decreases in rent amounts, with the average rent amount for Class A properties in the first quarter of 2013 at $1,571, a 0.8% drop. The average rent amount for Class B properties rose by 0.1% to $874, while average rent amounts for Class C properties fell by 1.3% year-over-year to $554.