Rental Applications Are Down: How to Keep Properties Full Without Increasing Eviction Risk

Don’t drop your standards — upgrade your screening

According to a TransUnion® study, rental application volume dropped 10.5% in the second half of 2025, with the sharpest dip happening during the traditionally busy moving season. For property management companies, this presents a significant challenge. Fewer applications mean fewer opportunities to fill vacancies.

The immediate instinct might be to lower screening standards to qualify more applicants. However, this approach can carry its own costs. Approving residents who pose a higher risk can lead to missed payments, property damage and costly eviction proceedings. The short-term relief of filling a unit can be quickly outweighed by long-term financial and operational strain.

So, what's behind this decline in applications and what can property managers do? The solution involves understanding the broader market and refining internal screening strategies.

Why are rental applications falling?

Two main forces are squeezing application volume: a surge in new inventory and persistent economic headwinds.

In several markets, especially across the Sun Belt, a wave of new multifamily inventory has come online. This gives renters more options and often leads landlords to make concessions to compete. When a nearby competitor offers two months of free rent, the cost of moving drops, which can lure current residents away.

Simultaneously, household incomes have not kept pace with rent cost increases. This gap has made many renters more cautious about taking on a new lease with higher monthly payments. Instead of moving, many are choosing to remain where they are. While high retention is generally positive, it also means fewer people are looking for a new home, contributing to the drop in application volume.

This context is important. A dip in applications doesn’t necessarily mean occupancy is collapsing, but it does mean each applicant in your pipeline is more significant. You have fewer chances of finding the right resident for each open unit.

The problem with lowering your credit threshold

When the applicant pool tightens, the most straightforward adjustment seems to be lowering your decision threshold. A lower minimum qualifying score means more applicants get approved and you have a better chance of filling the unit. The problem is this isn't always the best lever to pull. While you could fill more vacancies, it could lead to more evictions and skips down the road.

Screen for eviction risk, not credit risk

Generic credit scores were designed to predict loan repayment, not rental outcomes. They don't always capture the attributes most relevant to predicting evictions, such as rental payment patterns or how they manage debt relative to their obligations. For example, an applicant who makes slightly less than your standard income-to-rent requirement but has a consistent history of managing their financial obligations might be a better resident than someone who meets the income criteria but has a declining credit trajectory.

Before adjusting your credit thresholds, it’s useful to ask a few key questions:

• Is your income-to-rent requirement filtering out good applicants in a market where rents have outpaced income growth?

• How are you evaluating apartment-related collections and prior eviction patterns?

• Are your decision criteria designed to specifically predict eviction risk or general creditworthiness?

Use a scoring model built for multifamily

A competitive market calls for more sophisticated screening, not looser criteria. Most property managers rely on generic credit scores to evaluate applicants. The problem is those scores were designed to predict whether someone will repay a loan — not whether they'll pay rent on time or get evicted.

Renters behave differently from the general consumer population and their credit profiles reflect that. Many have thinner credit files, shorter credit histories or financial patterns that a generic credit score simply can't interpret well. A purpose-built screening model like Resident Score®, by contrast, draws on data from 2.7 million multifamily renters and analyzes more than 1,500 attributes to specifically predict eviction risk — delivering a 7% performance improvement over generic credit scores.

That distinction matters when the applicant pool is shallow. A resident who only earns 2.5 times the monthly rent might not pass the traditional "three times rent" rule, but if their financial behavior shows they don't take on debt they can't manage, they may be a lower eviction risk than a higher-income applicant with two recent delinquencies.

Don't overlook thin-file applicants

A significant portion of rental applicants can be unscorable under traditional credit models. Many of these individuals aren't financial risks; they’re simply new to credit. Younger renters, for instance, are entering the workforce with limited credit histories. A conventional score might disqualify them, even when their income and financial habits suggest they’d be dependable tenants.

For these thin-file applicants, layering alternative data points can provide a more robust picture:

• Income verification: Assessing bank and payroll data offers a view of an applicant's actual financial situation beyond what a traditional credit report might show.

• Rental payment history: Research has found renters are more likely to pay on time when their payments are reported to credit agencies. Applicants with a strong rental payment history can be evaluated on that track record.

• Behavioral trajectory: Static credit health only captures a single moment. A dynamic model that tracks trends like rising or falling balances and the timing of delinquencies tells a more holistic story. Two applicants with identical credit profiles can look very different when you account for their financial direction.

Use a layered fraud detection approach

A single fraud detection tool is often not enough. Reports indicate a high percentage of property management companies have experienced fraud, and many only identify it after a renter has moved in.

A layered approach can help by placing your most important verification tools early in the workflow:

1. Income verification first: Filter out applicants who don't meet income requirements before spending resources on deeper screening.
2. Identity verification: Go beyond simply scanning an ID. Look for signals that confirm the applicant is who they say they are and has no history of fraudulent rental activity.
3. Credit and eviction screening: Apply a rental industry specific scoring model that’s designed to predict eviction risk rather than general creditworthiness.

Each layer addresses different types of rental fraud risk. This robust approach helps account for various fraudulent activities — from misrepresented income to more organized schemes.

Know your market and focus on retention

Macro trends don’t tell the whole story. What's happening in your specific market — your competitive set, the credit profile of your resident base and retention rates at comparable properties — can look very different from national averages. Using market-level data allows you to benchmark your property against similar communities in your area. This helps you understand whether your screening criteria are calibrated to the actual applicant population you’re serving.

Tools like TransUnion’s TruVision™ Property Review® allows property  managers to benchmark their own property against comparable communities in the same market and the MSA. Tracking resident score trends, debt-to-income distributions and move-in/move-out patterns across your competitive set helps you assess whether your screening criteria align with the actual applicant population in your area — rather than relying on a national standard.

Survive the rental slowdown

Finally, remember every vacancy you reduce is an application you don’t need to find. This is particularly valuable in a market where application volume is down. The financial logic is clear: It costs significantly more to find and approve a new resident than to keep an existing one. In markets where competitors are using concessions to attract residents, the value of a good resident who stays becomes even more pronounced. Proactive outreach, responsive maintenance and thoughtful lease renewal incentives are not just operational details — they’re a core part of your occupancy strategy.

Protect your standards, expand your vision

A tighter application pool doesn’t require a choice between keeping standards high and properties full. It requires a more sophisticated approach to understanding who your applicants truly are. By investing in screening tools calibrated for eviction risk, layering in alternative data and using market-level intelligence, you can make decisions grounded in what’s actually happening in your local area. That’s how you fill properties without the costly mistake of renting to the wrong people.