Seattle, Portland Tops In Rental Application Approval Rates

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The Editors's picture
Seattle, Portland tops in rental application approval rates

Rental application approval rates for apartment leases are over 90% in the millennial hubs of Seattle and Portland, according to rentcafe.com.

Seattle and Portland, along with San Diego, San Francisco, Los Angeles and Washington, D.C.  are very active and high-priced rental markets with thousands of new apartments to fill every year, being in the top 20 cities in the country with most apartment units completed in the last two years.

 

Seattle is No. 1 in rental application approval rates

Number one on the list, Seattle, is a popular city for millennials, with the highest share of Gen-Y rent applicants of all cities analyzed.

In Seattle, 93.7% of rental applications end up in a lease.

Being one of the hottest and most active rental markets in the post-recession years, Seattle is among the top cities in the country for both construction of new apartments and rent growth, according to rentcafe.com.

Portland is No. 2 right behind

Second on the list of cities with highest rental application approval rates, with 91.1%, is Portland, according to rentcafe.com.

Portland is also a millennial city, with 71% of renter applicants from Generation Y, as well as one of the fastest growing rental markets in the U.S. in recent years.

San Francisco and Irving, TX, both in the top for highest approval rates, also have very high percentages of millennial rental applicants, about 74.5% each.

Over 60% of rental applicants in 2017 are millennials and applicant profile data reinforces the claim that millennials represent the majority of the U.S. renting population, according to rentcafe.com.

Seattle has the largest percentage of millennial rental applicants, 78.5% vs 60.3% the national average.

According to a recent analysis of resident screening data provided by RentGrow, a tenant screening service, which includes lease applications processed between 2014 and 2017, the percentage of applications that are approved nationally is increasing, from an 81.7% approval rate in 2014 to 83.2% in 2017.

Scottsdale Arizona and cities with limited apartment inventory show more application rejections

A quarter or more of people who apply for rent in Scottsdale, Arizona, Detroit, Michigan, Arlington and Garland in Texas, and Henderson, Nevada outside Las Vegas are rejected.

With some exceptions, the cities with the lowest approval rates are markets where the apartment supply is more limited. With a lesser number of apartments to fill, landlords can be pickier, according rentcafe.com.

 

Highest rental application approval rates are in Seattle and Portland

 

High income renters and higher credit scores

“We know there has been a significant rise in the number of high-income renters in the last decade, as luxury rentals have become more commonplace,” writes Nadia Balint in rentcafe.

  • Secondly, landlords are more motivated than ever to approve more applications in order to fill up the hundreds of thousands of new apartments opening every year.
  • Additionally, a closer look at the screening data also shows that the average credit score of applicants has improved over time, from 612 in 2014 to 628 in 2017, a fact that supports an upswing in approval rates as well.

Why applicants get rejected

“It’s not how much you make, nor how high your credit score is. Even with a good enough credit score, an applicant may still be rejected,” she writes.

About 33% of applications are rejected because of accounts in default, collection, or charged-off, from minor to severe levels.

Read the full report here.

Methodology:

Analysis compiled by RENTCafé based on data from RentGrow, an online tenant screening system featuring comprehensive reports, reliable data and automated recommendations for property owners and managers. The lease applications analyzed were submitted between January 2014 and June 2017, in the largest 100 U.S. cities. Relevant income data was available for 60 U.S. cities only. Income amounts represent individual annual gross income.

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