RealtyTrac Data Shows Decline in Default Risk Among Owners of Single-Family Rental Properties

IRVINE, Calif. – August 18, 2021 – A new analysis released today from RealtyTrac shows the average Default Risk Score (DRS) for single-family rental homes declined by almost 16% in six months, dropping from 43.6 to 36.7 in the nation’s 100 largest counties based on property count. The RealtyTrac Rental Property Risk Report gauges the relative default risk, using a scale of 1-100, of single-family rental homes, almost 90% of which are owned by mom-and-pop investors who own fewer than 10 properties, many of which carry a mortgage.

In addition to looking at the risk score for all 100 counties, the report identifies the counties with above-average default risk. According to the research, the ratio of counties at above-average default risk also declined, but almost half of all counties are still at elevated risk levels, with 45% having an above-average DRS compared with 53% six months ago. New York County in New York was the most at-risk with a score of 73.7 compared with the previously top-ranked Mohave County in Arizona which had a score of 77.2 in February 2021. Salt Lake County in Utah maintained its position as the lowest-risk county with a score of 6.9, a decline from its previous score of 17.2.

“We’re seeing a decrease in the RealtyTrac Default Risk Score due to declining unemployment rates, one of the three criteria we analyze for our score,” said RealtyTrac Executive Vice President Rick Sharga. “But even with the decrease, the risk for default among these rental property owners is still very real, especially in California and Florida.”

  • Among the top 25 highest risk counties, California (5) and Florida (4) account for 36%.
  • Among counties at above-average default risk, Florida (8) and California (7) together account for a third (33%) of the highest risk counties.
  • At-risk Metropolitan Statistical Areas (MSAs) among the top ten highest risk counties include:
    • New York, N.Y.
    • Myrtle Beach-Conway-North Myrtle Beach, S.C.
    • Bakersfield-Delano, Calif.
    • Dayton, Ohio
    • Cape Coral-Fort Myers, Fla.
    • Riverside-San Bernardino- Ontario, Calif.
    • Ocala, Fla.
    • Seattle-Tacoma-Bellevue, Wash.
    • McAllen-Edinburg-Mission, Texas

The RealtyTrac Rental Property Risk Report, using real estate and mortgage records from ATTOM Data Solutions, analyzed data from the 3,143 counties across the United States against three criteria to determine which counties might be the most at-risk of single-family rental properties going into default: the percentage of properties in the county that were rental units; the unemployment rate in the county; and the degree to which rental properties were leveraged (the loan-to-value ratio). A weighted average was created using those criteria on a scale of 0-100, with 100 representing the highest potential risk. Counties with a high percentage of rental properties, high unemployment rates, and high LTV ratios had a higher risk score; while counties with a low percentage of rental properties, low unemployment rates, and low LTV ratios were considered less at risk.

“As the economy recovers, it makes sense to see a lower default risk for rental property owners,” Sharga noted. “But many landlords still need financial relief after the government’s 18-month eviction ban, so it’s critical for state governments to begin distributing the $45 billion that has been set aside to cover missed rent payments for tenants whose income was impacted by the pandemic.”  

Ten Highest At-Risk Rental Markets of the 100 Largest U.S. Counties

CountyState% SFR PropertiesLTV RatioUnemployment RateRisk Score
New YorkNew York45%53%7.5%73.7
HorryS. Carolina50%55%4.5%66.3
KernCalifornia45%42%10.1%66.0
MontgomeryOhio39%57%5.7%64.2
LeeFlorida47%46%4.6%56.8
San BernardinoCalifornia40%38%7.3%56.4
RiversideCalifornia39%39%7.2%55.7
MarionFlorida42%43%5.3%54.8
PierceWashington39%41%5.8%51.9
HidalgoTexas32%44%9.7%51.7

Source: ATTOM Data Solutions, Bureau of Labor Statistics, RealtyTrac analysis

Ten Lowest At-Risk Rental Markets of the 100 Largest U.S. Counties

CountyState% SFR PropertiesLTV RatioUnemployment RateRisk Score
Salt LakeUtah17%34%2.8%6.7
GwinnettGeorgia15%46%3.5%16.6
TravisTexas18%35%4.2%18.8
HennepinMinnesota13%45%4.0%19.4
FairfaxVirginia15%49%3.7%20.0
CobbGeorgia20%51%3.2%20.0
WakeN. Carolina22%44%3.7%20.3
OaklandMichigan25%48%3.4%22.2
CollinTexas19%39%4.6%23.4
DentonTexas17%42%4.6%23.7

Source: ATTOM Data Solutions, Bureau of Labor Statistics, RealtyTrac analysis

About RealtyTrac

Founded in 1996, RealtyTrac publishes the largest database of foreclosure property information in the U.S. along with other real estate and mortgage data used by real estate investors and professionals to find, analyze and purchase residential and commercial distressed properties. RealtyTrac is owned and operated by ATTOM Data Solutions, a leading provider of publicly recorded tax, deed, mortgage and foreclosure data as well as proprietary neighborhood and parcel-level risk data for more than 150 million U.S. properties. For more information, visit www.realtytrac.com.

Media Contacts:

Alyson Austin                                                                                   Lori Guyton

alyson@gaffneyaustin.com                                                           lori@gaffneyaustin.com

949-403-0484                                                                                   901-277-6066

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