Home / Daily Dose / Rental Vacancies Poised to Drop
Print This Post Print This Post

Rental Vacancies Poised to Drop

Rental BHAs 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 drop 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.

Vacancies were highest in the Houston metro area, where 9.8 percent of properties sat vacant for the month. Sarasota-Bradenton-Venice, Florida also had a high vacancy rate at 7.7 percent.

According to Morningstar, it’s unsure if there’s a link between vacancy rates and the two states’ recent natural disasters.

“At this time, it is too early to attribute any changes in local rental markets to hurricanes Harvey and Irma,” Morningstar reported.

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.

About Author: Aly J. Yale

Aly J. Yale is a longtime writer and editor from Texas. Her resume boasts positions with The Dallas Morning News, NBC, PBS, and various other regional and national publications. She has also worked with both the Five Star Institute and REO Red Book, as well as various other mortgage industry clients on content strategy, blogging, marketing, and more.
x

Check Also

Aspen Heights to Build New Single-Family Rental Community

Hutto, Texas will be home to the brand's latest built-to-rent community during a time of "incredible demand for SFR options," a spokesperson says.

Your Daily Dose of DS News

Get the news you need, when you need it. Subscribe to the Daily Dose of DS News to receive each day’s most important default servicing news and market information, absolutely free of charge.