From Recession to Boom Times

Renter Profile Shifts - Seite 2

In addition, renters have generally become older since 2009, with significant changes observed for the youngest and oldest consumer groups. In 2009, 22.6% of renters were younger than 25; by 2015, the youngest age group had declined to just 20.3% of all renters. Renters ages 45 and older were 23.5% of the renter population in 2009, but grew to 31.3% by 2015.

"Following the Recession, younger consumers may have been underemployed or chose to live at home with their parents. Older consumers may have opted to stay in a rental unit instead of purchasing a home," said Mike Doherty, senior vice president of TransUnion's rental screening solutions group. "The good news for property managers is that renters of all ages are managing their credit obligations well. Property managers can help renters build or improve their credit scores by reporting rental payments to the credit bureaus, giving renters the credit they deserve for on-time payments."

Using Aggregate Excess Payment to Understand Rental Affordability

To determine how renters are impacted after a move, TransUnion used its CreditVision® aggregate excess payment ("AEP") algorithm, which incorporates monthly payments from mortgages, credit cards and other debt obligations. A consumer with a positive AEP could take on new payments and has money available after their monthly minimum payments are made.

In 2009, 53% of renters had an AEP greater than $100. By 2015, the percentage of renters with an AEP of $100 or more grew to 59%.

"Our findings indicate that we are not on the cusp of rental affordability issues, as the vast majority of renters do have some excess liquidity once their monthly debt service obligations are met," said Doherty. "In fact, more than half of renters have an AEP greater than $100, a promising sign for property managers. Property managers should consider these factors, as well as credit history and rental payments, to gain more insights into the consumer wallet as part of their screening process."

For more information on TransUnion's solutions for property managers, please visit http://www.transunion.com/industry/property-management.

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