Rising Rents, Lower Credit Scores in Phoenix — What’s Next?

By Angela Gonzales | Phoenix Business Journal

While year-over-year apartment rents continue to rise in metro Phoenix, the credit scores of renters are dropping.

Renters in Phoenix have an average credit score of 613 in 2020, down from 619 in 2019 and 617 in 2018, according to a new study from RentCafé.

Looking at the score by building type, Phoenix renters in high-end apartments have an average score of 651 — the highest in the state, according to the study. The credit score of renters in mid-level units is the lowest in Arizona for this type, at 595, while the average of those in low-end units is 585.

The minor dip in the average credit scores among renters most likely was a function of the economic stress and volatility caused by the coronavirus pandemic, said Peter O’Neil, research director for NorthMarq.

“Two of the biggest factors that influence credit scores are payment history and level of debt,” O’Neil said. “We experienced an unprecedented pace of job cuts — nationally and in Phoenix — during the spring, and while the labor market is rounding back into form, some job loses are still lingering.”

Doug Ressler, business intelligence manager at Yardi Matrix, a sister company to RentCafé, said employment drives credit scores.

“Phoenix’s resilience helped it occupy a high spot among the nation’s top 10 best performing metros during the health crisis, having lost fewer jobs than most,” Ressler said. “In addition, Phoenix has recovered 85% of the initial first quarter job loss caused by the pandemic.”


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