IRVINE, Calif. – Renters in the Northeast region of the United States are most likely to fulfill the terms of their lease, according to a report released by CoreLogic examining renter application risk during the first quarter of 2013.
The Northeast region includes the six New England states as well as New Jersey, New York and Pennsylvania.
The CoreLogic report included an index which the company said provided “market-based benchmarks for evaluating credit quality and risk of default” for renters applying for apartments in multifamily homes and single-family rentals. An index value above 100 indicates an improved credit quality and decreased lease default risk. A value below 100 represents the opposite.
The data showed that the nationwide index value was 104 for the quarter. This is a two point increase from the index value for first quarter of 2012.
The Northeast and West regions elicited the highest regional index values for the first quarter of 2013 with index values of 111 for the Northeast and 110 for the West. The results indicate that these areas have the highest potential for rental lease performance in the nation. The Midwest garnered a lower credit quality of 100, a two point increase from a year ago.
“As the economy continues to grow slowly, conditions appear cautiously optimistic for continued improvement in renter applicant qualifications in the year ahead,” CoreLogic SafeRent Senior Director Jay Harris said in a statement. “During this relatively upbeat period, renter trends are pointing towards increased confidence among property owners and applicants.”
The report, which is released quarterly by the real estate-data firm, also showed that applicant incomes increased marginally across all property classes and in the past year the credit of prospective property renters improved.
Applicant incomes increased in this quarter. The income of applicants for Class A properties, or properties with rents greater than $1,100, increased one percent. The income of applicants for properties with rents between $750 and $1,100 (Class B) and lower than $750 (Class C) increased by less than one percent.
Across all property classes, the rent to income ratio increased. The ratio for the highest property class increased by seven percent, coming to a 22.9 percent rent to income ration, per lease. The ratio for Class B properties increased 11.2 percent and the ratio for Class C properties increased 10.1 percent.