Rental Vacancies Poised to
As lease expirations decline on single-family rental securitizations, vacancies have started to level off. And according to Morningstar Credit Ratings recent Single-Family Research, those vacancies are likely to in the near future.
According to Morningstar’s research, which looks at property-level information across rental securitizations, lease expirations slipped from 9 percent in July—its 2017 high—to 6.2 percent by September. Average vacancies stayed largely steady for the month, ticking up just 0.1 percent since August.
But that slight increase likely won’t continue, Morningstar reports.
“The average vacancy rate increased slightly to 5.9 percent in September, but the decline in expiring leases could indicate a corresponding decline in the average vacancy rate soon,” the report stated.
Delinquencies on rental securitizations rose incrementally for the month, increasing 0.8 percent. Nine securitization deals showed delinquency rates of 1 percent or higher—up from just four deals the month before.
Rents also rose across single-family rental pools as well, jumping about 3.5 percent in September. Rents rose most on recently renewed properties.
“For August, the latest month for which data is available, the rent change for vacant-to-occupied properties was 1.5 percent, while the rent change for renewal properties was at 4.4 percent,” Morningstar reported.
Still, despite upticks, rents are largely on pace with estimates set out by RentRange, an online tool offering rent comparisons and rental estimates. The biggest exception was the Sarasota-Bradenton-Venice metro area, where renewal rents were actually lower than most RentRange estimates.
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