Renter credit quality declined in Q4 2009, according to the Multifamily Applicant Risk Index (MAR Index), derived from First Advantage SafeRent’s statistical screening model and database of transactional data on more than 6 million apartment units.
The Q4 MAR Index, which includes studios, one-, two-, three- and four-bedroom units, was 98. That is down six points from Q3 2009’s value of 104, indicating a riskier applicant pool in this quarter, which largely reflects seasonal fluctuation typical of quarters with lower applicant traffic. Compared with Q4 2008, the MAR Index is slightly lower at 98 compared with last year’s 99.
For the year as a whole, applicant credit quality was in line with normal seasonal levels, according to the MAR Index. As usual, seasonal patterns in credit quality and volume were more pronounced than were year-over-year changes in 2009.
In the face of 5 million jobs lost in the national economy, same-store apartment application demand nationally was flat in 2009 compared to the prior year. Though rents were down, this steady supply of applicants reaffirmed the demand apartments enjoy, in contrast to other real estate sectors.
Forecasts for the year ahead show positive economic growth nationally, but suggest only a small improvement in job growth. As operators prepare for 2010, they continue to lower decision credit criteria to attract traffic. Markets with the leading increases in the MAR Index were Denver-Boulder-Greeley, Colo.; Portland-Salem, Ore.; and Indianapolis. The markets with the leading decreases were Jacksonville, Fla.; Atlanta and Phoenix-Mesa. Visit www.FADVSafeRent.com for details.