Rental prices across the U.S. increased in 2013, even as the credit risk of residents in those properties improved, according to the latest TransUnion Rental Screening Solutions industry report.

The study found that average rental prices increased nearly 4% from $1,034 in Q3 2012 to $1,072 in Q3 2013. As measured by TransUnion’s Resident Scoring Model, the credit risk of residents in those properties steadily improved, with an average improvement of 1% in the past year.

“Demand for rental units remains high,” says Mike Doherty, Senior Vice President of TransUnion Rental Screening Solutions, Inc. “This, combined with improved rental risk scores, is particularly good news for independent landlords and property managers.”

Property Level

September – 2012

September – 2013

Pct. Change

A

$1,198

$1,244

3.8%

B

$1,008

$1,047

3.8%

C

$843

$860

2.1%

D

$665

$693

4.2%

As indicated, the rental picture is further enhanced by the improvement of residents' credit risk. This improvement, according to the TransUnion Resident Scoring Model, can be seen across the board:

  • Property Level A - up 0.9%
  • Property Level B - up 0.3%
  • Property Level C - up 1.3%
  • Property Level D - up 1.7%

 

“As landlords and property managers assess the types of residents they want for their properties, it’s very helpful to have a clear understanding of the risk level of the rental population,” Doherty says. “This knowledge enables landlords to tighten other criteria in order to ensure they get the best possible resident for their properties.”

TransUnion’s analysis also observed trends in key markets such as Chicago, Los Angeles and New York between Q3 2012 and Q3 2013:

  • Chicago - Average rental costs increased nearly 5% from $1,345 to $1,411. Credit risk remained the same.
  • Los Angeles - Average rental costs rose 3.2% from $1,565 to $1,615 while credit risk improved 1.1%.
  • New York - Average rental costs increased 5.5% from $2,389 to $2,520. Credit risk improved slightly (0.4%).

 

Independent landlords can use TransUnion SmartMove to conduct due diligence during the resident screening process. SmartMove helps landlords make educated leasing decisions by giving them access to the same tools for renter screenings (including renter credit reports) that larger property management companies use.