On-time rent payments rose to 83.1% in September 2025
On-Time Payments Improve for Mom-and-Pop Rentals
Key Takeaways
- On-time rent payments rose to 83.1% in September 2025 — a 58 bps month-over-month increase.
- Despite the gain, on-time payment rates have declined year-over-year for 26 consecutive months.
- Tenants are prioritizing catching up on rent, with full-payment rates proving more resilient than on-time payments.
- 2–4-unit properties led all asset types with the highest on-time collection rates at 83.7%.
Improving, But Still Below Peak
The latest data from Chandan Economics shows a slight improvement in rent collection across the independent landlord sector.
September’s on-time payment rate climbed to 83.1%, up from a downwardly revised 82.6% in August. The gain marks a potential turning point, though it’s too early to call a full recovery.
Tenants Catching Up, Even If Late
While late payments are on the rise, full-payment rates remain relatively stable. The forecast full-payment rate for September reached 94.5%, a 14 bps gain from August. This suggests tenants may fall behind, but are still making an effort to settle balances eventually.
Still, full-payment performance is below historical norms. The year-to-date average is 96.2%, compared to 96.6% in 2023 and 95.3% in 2024.
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Late Payments Rising
Late payments have become a consistent drag on rental performance. The share of late payers peaked at 12.5% in July and remained elevated in August (12.3%) and September (11.8%). While not as damaging as outright missed payments, these delays complicate cash flow planning for small landlords.
Sector and State-Level Insights
By Property Type:
- 2–4-unit rentals: 83.7% on-time
- Single-family rentals (SFR): 83.3% on-time
- Multifamily rentals: 81.7% on-time
By State:
- South Dakota: 94.9%
- Hawaii: 94.6%
- Utah: 94.1%
- Other strong performers include New Hampshire (91.4%) and Colorado (91.1%).
These state-level performances reflect ongoing regional disparities, with Western markets continuing to outperform most others.
Broader Economic Context
The overall rent payment performance remains below the April 2023 post-pandemic high of 88.3%. Credit data shows mounting household stress:
- Credit card delinquency rates hit 8.6% in Q2 2025 — more than double the rate in late 2021.
- Student loan delinquencies have spiked to 13.0%, an all-time high, disproportionately affecting younger renters.
Despite this, full-payment rates suggest that most tenants still prioritize rent once they’re able.
Looking Ahead
While far from a full recovery, the September data hints at stabilization in the mom-and-pop rental sector. If job losses remain limited and inflation stays in check, Chandan expects modest improvements in on-time payment rates to continue.
The sector’s resiliency hinges on economic stability and tenant income growth — especially as affordability remains strained across much of the rental market.
Source: CRE Daily
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