As expected, retention of renters when leases expired continued to increase in March as people find it difficult to find lower rents for comparable properties in this tight rental market. This is based on the analysis of just under 105,000 properties by Morningstar Credit Ratings, LLC. The retention rate for full-term leases increased for the second-consecutive month as the average rate reached 79.0% for January, the most recent data available. This contributed to lowering the vacancy rate across the same sector to 4.6% in February.
The Morningstar report tracks the performance of 27 single-borrower deals. Retention rates were above 70.0% for all but one single-borrower, while 12 deals posted rates above 80.0%. Additionally, the overall turnover rate was 2.4% for three months, as of the most recent data available. Morningstar expects that these factors may lead to lower vacancies in the coming months.