Class C apartments are beginning to soften as renewals and rent collections lag.
In a new analysis, RealPage's Jay Parsons notes that retention rates for Class C apartments "dropped more than expected" last month to end two percentage points down year-over-year to 58.1%. And while "that's still well above Class A and B (as Class C renters tend to be stickiest with fewest available alternatives)…it's also a five-year low," Parsons writes. Conversely, retention in Class A and Class B ticked down slightly and are above pre-pandemic levels.
Collections for Class C units also fell 0.2 points year-over-year and 0.5 points month-over-month to 93.7%, and the gap between Class C and Class A or B rents have widened. Class C rent payments tend to be lower than Class A or B, even pre-COVID. Class A collections hit 97% in July and 96% among Class B units.
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