The rental headlines don't add up

A fifth of renters missed a payment

The first article, an Urban Institute survey, says a fifth of working-age US renters were unable to make a full payment at least once last year, and the jump is unsurprisingly led by the middle class. It's not a secret that things are very hard for the middle and lower class in America. But I do think this number is potentially a bit misleading.

When we say 20% of renters were unable to make at least one full rent payment on time last year, that doesn't necessarily mean all of those people ended up being forced to move out of their homes, or that they didn't catch up their balance.

I think the more relevant number is how much delinquency we're seeing. At least for Findigs customers, we're not seeing a precipitous rise in delinquency. In the Findigs data, we don't see this very big brewing storm.

When you think about the middle class and everything that's happening, there are also some positive signals around consumer credit card debt. Credit card debt sits at about $1.26 trillion, which is a very scary number, but that's down slightly from the all-time high of about $1.28 trillion at the end of 2025. And the share of card balances going seriously delinquent has held steady over the past year.

Inflation has been high for the last few years. We've seen things like tariffs increase the cost of goods. And when 67% of Americans live paycheck to paycheck, any small disruption to the ecosystem might cause you to be late on a rent payment. The question is whether you cure it, and that's what the data in this article doesn't show.

So I think the more interesting question for operators is how you navigate this environment. One thing I've been on my soapbox about a lot is how you think about who you're saying yes to. In this data, the people you said yes to who missed a payment are showing up. They're showing up in your delinquency dashboards. But the people you turned away, you have no idea how they would have performed.

As consumer credit card debt stays high and inflation puts pressure on wallet share, looking at your underwriting criteria and asking, "Have I got the right questions in place? Have I got the right thresholds in place?" is an exercise I think every operator across the United States should be doing.

Zillow says rental demand is up 20%

Next, we have an article from Zillow saying rental demand is up 20% year on year, due to the high cost of purchasing a home driving a lot of people to rent.

I take issue with the methodology of this data. Based on everything I know about Zillow, it seems to me that this is more an indication of how many people are browsing and clicking than how many leases are actually getting signed.

In the Findigs data, the thing we use to analyze and track demand is the number of applications started per unit. When you have a unit, how many applications would you expect to start? Starts are largely outside the context of conversion. Maybe some people don't convert, and maybe that's a problem, but starts are, in our opinion, a pretty healthy benchmark for overall demand in the rental market.

And this is softer year on year. There's no way around that. Depending on how we slice the data, it's anywhere between 10% and 16% fewer application starts per unit.

So when I see 20% more demand, to me that might be people browsing. They're trying to find something that fits their needs. They're trying to find something affordable. But I don't think that necessarily translates to more leases getting signed, or an influx of demand in the rental market. I think it's still very hard out there, and we see a lot of competition in markets.

We're seeing increased competition for the same renters. The people you're actually approving, to us, that pool looks smaller year on year.

So for operators, be very intentional about your funnel. Everybody who comes through your funnel is somebody you've already paid to acquire, so do everything you can to convert as many of them as possible. That's making the fastest decision. It's having the best customer support. It's being very thoughtful about your approval criteria. It's the totality of optimizing your funnel.

I think this number in particular is a bit misleading. It's not what we're seeing in the data. But I'd be really curious to hear how Zillow is calculating it, because obviously Zillow has a ton of information on the rental markets.

@resetbasis viral Tweet

Here's a tweet from m. stanfield (@resetbasis) that's been sent to me by probably a dozen people. It's apparently a dinner with a multifamily executive who oversees 150,000 units, and the punchline is that the multifamily market is screwed. Across every dimension: Class A, Class B, Class C, lenders.

Look, markets are facing pressure right now. It's no secret that we have put the middle class and lower class in a really tough spot in America. Affordability is one of the most important issues to people. They're feeling the cost of inflation, of tariffs, of many of the things that have increased their cost of living and put pressure on wallet share.

But as I look at this, I think it paints an overly dark picture of the world. It kind of feels like there's a lot of data. But if you look, there's really nothing substantive we can point to and say, here is a trend over the last three years, other than more people are paying rent via credit card. That's true. The rise of Bilt in the past couple of years could very well be contributing to that. It's now cheaper to pay rent with a credit card, because Bilt has had amazing innovations in payments to make that possible.

There's anecdata in lots of places. They're considering dropping rents below $700 a month on some one-bedrooms in major southern markets. Foot traffic is down in some markets by 40 or 50%. We're not seeing a lot to corroborate this entire crisis.

Class A. Class A is luxury, amenitized buildings, the premium apartment stock. One of the core claims here is that Class A has seen rent growth, but the people in those units are much worse off, and that credit scores have declined in Class A buildings. That's just not what we're seeing in the data.

Findigs tracks the average household credit score. We've tracked it since the beginning of the company. Over the same three years, we've seen average household credit scores go up slightly. Household income has been flat to slightly up as well. So the claim that they're meaningfully deteriorating is not one I see corroborated in the data. I'm not seeing all these people who moved into Class A apartments with 700 credit scores and now have 600 credit scores. Maybe it's isolated to this particular operator. But I have a lot of questions about people being worse off in Class A units.

Class B. In Class B, the claim is we've simply built too much. We've overbuilt. We've oversaturated the market. I don't think that's true. I think we need more affordable housing in the United States, and Class B is quintessentially workforce housing. Sure, there are plenty of places in the country where we got really aggressive as COVID migrations happened. Austin comes to mind. But that also does great things for that city's affordability, and I think we need that more broadly across the United States.

In a lot of markets, it is true that there has been competition and price pressure, because construction costs have risen. But have we built too much Class B property in the United States? I think demonstrably the answer is no.

Of course, in this environment there is a lot of pressure on operators. Zillow's data shows that about 40% of rental listings are offering a concession right now, more than double where it was before the pandemic. So clearly, we're doing things to attract people and get them into homes. I don't think the answer is to stop building.

The low-income housing tax credit program, known as Section 42 or LIHTC, does a great job of incentivizing builders. It's one of the most successful initiatives to build affordable housing, and I think we need more of it. Knowing we're not going to be able to push rents as aggressively as we once did, we have to incentivize builders. Will that reset some supply? Sure. But there are plenty of places in the country where that's just not true, where we don't have nearly enough affordable housing.

What these numbers also don't take into account is whether operators have been efficient about their funnels. How many people are turned away from renting a Class B or Class C property who maybe shouldn't have been? How many people are having a really competitive search, looking at 10 different apartments, while you compete with 10 of your competitors for that same renter? We still see plenty of people in the funnel who would be great renters, and a lot of what we do is help our customers optimize for that.

Class C. Class C is a hard part of the stack right now. The costs to maintain properties have risen, things like labor and materials, and tariffs have had quite an impact there. Every dollar counts. And you're not necessarily making that up with rent growth, because the purpose of Class C is that these are more affordable properties.

Again, I don't see a smoking gun here. "Rents aren't growing for a long time, but expenses keep creeping up." Sure, agreed. "More renters are one missed paycheck away from disaster than they can remember seeing in decades." This has always been the case in America. "Tenants aren't paying rent because they simply don't have it." Again, we're not seeing that in our data. Our delinquency curves have been pretty static. So I'd be really curious to see the methodology here.

That's not to say there aren't significant pressures in the market. Rates are much higher than they were five years ago, especially for owners with floating rate debt. Where you are in your refi cycle matters a lot. That's a pressure they're going to have to figure out.

And in general, there are only a handful of operators in the country who manage 150,000 units. Many of them aren't equally distributed across Class A, B, and C, so I don't look at this and think they'd have a really good vantage point on all three. To me, this is a bit of fear-mongering. There are certainly challenges in the market, but nowhere near the extent of this tweet.

Recap

So, to recap, we've looked at three articles. One says one in five renters were unable to make an on-time payment at some point last year. Zillow says demand for rentals has increased 20% year on year. And the tweet says the world is absolutely ending and all of multifamily is going to zero, basically.

These things tell a very conflicting narrative. People are struggling to pay rent, more people want to rent, and everything is terrible.

Many years ago, a mentor recommended a book to me that I love, called How to Lie with Statistics. This is cherry picking a lot of data to tell a story. If we look at the methodology of any of this data, I think it's really important to drill down on what we're actually trying to figure out. Are people better or worse off? Are fewer people renting, or more people renting? Are there significant pressures that are going to reset multifamily rents in the United States? These are the thorny questions, and I don't think we can answer them with any of the data presented here.

If one in five people missed a rent payment, how many of those eventually cured? How many of them caught up? Was it a one-time thing? To be honest, I missed a rent payment this year. We went on vacation, I forgot, so we didn't send it in time. I got a late fee. I would have been included in that number.

Conventionally in mortgage, we often look at D60, delinquency after 60 days, as a much more indicative benchmark of how people are actually doing. Looking at this in a vacuum, we don't have enough data. We don't know the underlying results for all these people.

Zillow, again, I'd love to see how the Observed Renter Demand Index is calculated, because we're not seeing demand increase 20% year on year. Maybe more people are clicking through, looking, and trying to find something. I have no reason to doubt them that 20% more people are clicking. But how does that actually materialize into people converting? Based on our data, that's softer year on year. We're not seeing it result in move-ins.

And then you have the world-is-ending side of things. Again, that's directly at odds with a lot of what we're seeing in the data. I'm not refuting the claim that there is significant pressure in markets right now. Rates are higher. Operators have higher financing costs. It's more expensive to maintain properties. Demand is a bit softer.

Does that mean there's an impending 2008-style blowup in multifamily real estate? I don't think so.

Sources

• Urban Institute, "Renters Increasingly Struggle to Pay for Housing," Well-Being and Basic Needs Survey, September 2026
• Zillow, "Rental demand is up 20% as high lending costs stifle the for-sale market," October 15, 2026
• Federal Reserve Bank of New York, Quarterly Report on Household Debt and Credit, Q2 2026
• Investopedia, "You're Not Alone: 67 Percent of People Are Living Paycheck to Paycheck"
• Zillow Research, July 2026 Rent Report and pre-pandemic comparison from Zillow, "It's a renter's market: 2 in 5 listings come with a deal this spring"
• m. stanfield (@resetbasis) on X, October 21, 2026