DALLAS—This is a record-breaking year in more ways than one, with more new apartments coming on line annually than at any time in the last 20 years. Homeownership is at an historic low, rents are growing and the renter cohort keeps expanding.
The percentage of rental applications approved has been constantly increasing since 2014, according to a recent analysis by RENTCafé of resident screening data provided by RentGrow, a tenant screening service.
“Nationally, 81.7% of applications for lease submitted in 2014 were approved and the rate has gone up to 83.2% in 2017. The percentage point change may seem inconsequential, but for every 1 million applications, the increase translates into an additional 15,000 approvals,” RentCafe real estate editor Nadia Balint tells GlobeSt.com.
Gen-Z applicants boast the highest acceptance rates at 91.8%. Gen-X-ers, generally regarded as the most debt-laden generation in the country, have the lowest approval rates on rental applications at 77.5%.
With record numbers of new apartments delivered in recent years, the Texas rental market is now among the top most competitive in the country. The upswing in approval rates fares well for renters in certain markets.
For renters in the DFW area, Plano is the best bet with 89.4% of applicants getting approved, followed by Irving with 88.8%. Both cities are in the top 15 in the country for highest approval rates, along with Austin at 88.6% approvals. Dallas, where no fewer than 9,300 units are expected to enter the market this year, is also reporting a high approval rate of 84.8%. The average income of approved submissions is around $51,433 versus $44,345 for those rejected.
If more apartments mean more choice for renters–and higher acceptance rates in general–approvals are less rosy for renters in cities where demand is strong and available rental stock is limited. Rejection rates are among the most worrisome in the country in both Arlington and Garland, TX at 26.8% and 25%, respectively. In addition to income factors, about 33% of applications are rejected because of accounts in default, collection, or charged off from minor to severe levels.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
