Delinquency rates remained low across single-family rental securitizations, with the average rate across 24 transactions coming in at 0.6 percent as of the end of February, according to data reported by Morningstar Credit Ratings in its March 2016 Single-Family Research: Performance Summary Covering All Morningstar Rated Securitizations released this week.
Only four of the 24 transactions covered in the report had a delinquency rate of 1 percent or higher, according to Morningstar: ARP 2014-SFR 1 (American Residential Properties had the highest rate in February at 2.2 percent, holding steady from January’s rate. SWAY 2014-1 (SWAY Residential, which merged with Colony American Homes in January) came in at 1.3 percent, and TAH 2015-1 (Tricon American Homes) and PRD 2015-SFR2 (Progress Residential) each had delinquency rates of 1.0 as of the end of February. Half of the securitizations had a delinquency rate of 0.5 percent or less.
Delinquency rates dropped in 19 of the 24 transactions in February and increased over-the-month for only one (SWAY 2014-1). The average delinquency rate for all transactions declined from 1.0 percent in December down to 0.8 percent in January and 0.6 percent in February, according to Morningstar.
Lease expirations trended higher again in February, with 21 of the 24 transactions in the summary experiencing increases; January saw a similar trend, with 20 of the 23 transactions in that report experiencing increases in lease expirations.
“Morningstar believes these increases may lead to higher vacancy and turnover rates in the coming months,” the report stated. “For now, though, overall vacancy rates dropped in February, as those higher expirations have not yet translated into unoccupied properties.”
The vacancy rate for AH4R 2015-SFR 1 has dropped dramatically since peaking at 9 percent in November; by January, it had fallen to 6.9 percent, and by the end of February, it was at 5.3 percent. The vacancy rates for CAH 2014-1 and PRD 2015-SFR 1 have declined for six straight months and as of the end of February, totaled 3.4 percent and 4.1 percent, respectively, according to Morningstar.
Click here to see the complete March 2016 Single-Family Rental Research: Performance Summary Covering All Morningstar-Rated Securitizations. Transactions covered in the summary are those from American Homes 4 Rent, American Residential Properties, Colony American Homes, Home Partners of America, Invitation Homes, Progress Residential, Silver Bay Realty, SWAY Residential, and Tricon American Homes.