Rent Payments Slip a Bit for Apartment Residents in November

The National Multifamily Housing Council’s Rent Payment Tracker found 78.2% of apartment households made a full or partial rent payment by Nov. 6 in its survey of 11.8 million units of professionally managed apartment units across the country.

This is a 2.2 percentage point decrease from the share who paid rent through Nov. 6, 2020 and compares to 81.5% that had been paid by Nov. 6, 2019. This data encompasses a wide variety of market-rate rental properties across the US, which can vary by size, type and average rental price.

However, noteworthy technical issues may make historical comparisons imprecise. For example, factors such as varying days of the week on which data are collected; individual companies’ differing payment collection policies; shelter-in-place orders’ effects on residents’ ability to deliver payments in person or by mail; the closure of leasing offices, which may delay operators’ payment processing; and other factors can affect how and when rent data is processed and recorded.

Meanwhile, publicly traded rental housing providers are seeing strong financial standing by their residents.

Rents are Up, And So Are Renters’ Incomes

RealPage Rental Housing Economist and Real Estate SaaS VP Jay Parsons pointed out in a blog this week that renters are in remarkably strong financial shape today, according to nearly every publicly traded rental housing provider in both the apartments and single-family rental categories. 

“Of course, most REITs cater to middle- to upper-income renters,” Parsons wrote. “It doesn’t represent the broadest population of renters. But it’s still a very large representation, and a very positive tailwind for the sector.”

Parsons shared are some anecdotes from Q3 earnings calls on renter incomes and affordability:

MAA: “If we go back to the Q3 of ’19, two years ago, income for our residents has gone up about 17%. So, while rents have increased quite a bit, our incomes have as well.”

Invitation Homes: “Our average household is over $120,000. It puts us at a rent to income ratio of 5 times, which is as healthy as we’ve seen.”

UDR: “When you look at our rent to income ratios relative to pre-COVID, they have not moved.”

American Homes 4 Rent: “Our approved applicant incomes are up about 10%, which is pretty close to our new lease rate growth. So, the incomes are keeping pace with this fantastic growth.”

EQR: Our residents were “less impacted by the pandemic as they kept their jobs and continue to pay rent.”

AvalonBay: “Our resident base with concentrations employed in knowledge-based industries are in high demand in today’s labor market, setting the table for future rent growth as wages continue to rise.”

Centerspace: “We haven’t seen any drop off in qualified applicants…I do think that to the extent that there is inflation in the rents … people are also feeling it in their wages.”

Camden: “Our customers are really in good financial shape today. And I think that’s what’s sort of driven the demand not just for apartments, but for single family homes.”

Wash REIT: “We are heartened by the strong income growth that we’ve actually seen.”