Top US Cities by Tenant Financial Health

Our Tenant Credit Profile maps financial wellbeing trends for tenants in multifamily buildings

With all the discussion about eviction moratoriums, stimulus packages, and unemployment, everyone is wondering: how healthy are US multifamily tenants financially?

Past rent collections are frequently quoted as indicators of tenant financial health – but that’s a lagging indicator. What about next month? 

We used our new Tenant Credit Profile dataset for a different approach. The dataset includes how tenants at hundreds of thousands of properties across the U.S. are paying the loans and credit obligations, which is a leading indicator of tenants’ ability to pay their rent. If tenants run into financial difficulties, they typically make every effort to keep paying their rent – that’s the last payment they miss. Before they do, many indicators of financial distress show up on tenant credit reports. Credit data is a more complete view of tenant financial health as it includes all major tenant loan and credit obligations.

Financially Healthiest Metro Areas

We examined how the credit health of multifamily tenants changed since the pandemic began by metro area. Here’s our approach: rank metro areas by the proportion of multifamily properties that had a median drop in credit score of 10 points or more. We only included metro areas with at least 300 properties. 

Here are the metros with the healthiest properties:

At the other end of the spectrum, here are the metros with the highest concentration of properties with score drops:

Tenant Credit Health Bears Scrutiny

But here is a twist: under the CARES Act, consumers affected by the pandemic can defer payments on their loans and cards without affecting their credit scores. In our view, that’s a hidden risk not captured in credit scores.

Which metro areas have high concentrations of properties with lots of deferments on tenants’ loans and cards? Surprisingly, Jacksonville, the healthiest metro area from a credit score perspective, has the second highest proportion of properties with high concentrations of tenants with deferred payments.

If you’d like to learn more about U.S. Tenant Financial health, we’ll be covering these statistics and much more in greater detail during our inaugural quarterly Tenant Financial Health Webcast on February 3. Click here to sign up for the webcast.

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