A new nationwide National Multi Housing Council study says owners of the biggest apartments are seeing very few applicants applying to rent after a foreclosure.
NMHC says apartment industry data show only 2% to 6% of all apartment applicants were seeking to rent after running into trouble with their mortgage.
In fact, only 23.5% of apartment applicants have ever even had a mortgage, according to First Advantage SafeRent, which does apartment applicant screening. Only 5.4% of those with previous mortgages had ever been 90 days behind or defaulted.
Experts have several theories about why there hasn't been a flood of foreclosure refugees into apartments:
- Foreclosures may involve investment properties
- Some are renting houses rather than apartments
- Those with credit problems are applying for units that don't screen applicants
- They could be moving in with family.
That doesn't mean the coast is clear, notes the study, "Renter Credit Quality in a Volatile Housing Market."
"Given that foreclosures take time and that additional pressure will be put on financially burdened homeowners as adjustable-rate mortgages continue to reset in 2008 and 2009, it is reasonable to expect the number of applicants with foreclosures to continue to increase, perhaps dramatically, from current levels," said the report.
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