Navigating the Rental Crisis: Affordability, Screening, and Fraud

The rental market in the United States now appears significantly different in 2025 compared to what it was ten years ago. In recent years, home prices have increased dramatically, and housing affordability has reached crisis proportions. As a result, there has been an increase in renter application fraud, a complex problem in its own right. 

This is where tenant screening comes in to help landlords choose trustworthy tenants, stabilize occupancy, and lower turnover costs, all of which contribute to addressing the rental crisis. Continue reading to find out more about the rental affordability crisis, tenant screening, and how property managers can prevent fraudulent rental applications.

Understanding the Rental Affordability Crisis 

• Rising Market Costs

Due to rising mortgage rates and salaries that have been unable to keep pace, home prices have increased dramatically in recent years, and affordability has reached crisis levels. The rising cost of renting places an overwhelming financial burden on families while increasing the number of landlords who are passing inflation and interest rate increases onto their renters.

However, median salary growth has supported rental demand over the past six years, keeping up with net growth in apartment rent even if it has lagged behind the cost of buying. Access to cheap housing options is mostly dependent on rentals.

• Limited Housing Supply

There is an especially severe scarcity of smaller apartments to accommodate the growing demand from new, smaller households, as well as older households. Correspondingly, an enormous cost burden is placed on these tenants, as household units are scarce, making it impossible for many to afford rent.  

The deficit of all housing has grown to 4.7 million units since 2010 despite increased activity in the building trade. The growth of the existing population and household formation has not kept pace with the construction of new homes; consequently, the need for affordable rental units remains unmet.

• Impact on Landlords and Tenants

The U.S. rental affordability crisis forces tenants to allocate a significant portion of their income toward rent. The upfront nature of annual rental increases, rent hikes, and other similar demands makes it difficult for renters and the people who rent apartments. Because tenants who are currently renting often rely on loans or government welfare, many renters continue to accumulate pending debts and are at risk of eviction. Meanwhile, other leaseholders, including those struggling to pay their rent, face the risk of losing their homes due to limited access to quality housing.

For owners, there is also an increase in operational costs and a decrease in expectations for continued rent growth due to economic downturns. Due to increased vacancy pressures, owners are now under pressure to raise rents and lower occupancy rates to increase profits. In many markets where rent has become unaffordable, landlords now have to place increased emphasis on potential screening and managing abandoned properties, following the passage of laws against evicting renters. Now more than ever, it’s important to work with a competitive property management team in Baltimore County MD, to thoroughly assess rental applications.

What is the Role of Tenant Screening During a Rental Crisis?

In times of rental crisis, tenant screening is important for risk management among landlords, as it helps identify tenants who are most likely to pay their rent on time and be responsible tenants. This reduces the likelihood of eviction, vacancy, and fraud, while maintaining stable occupancy and rent payment collection during periods of increased delinquency.

Tenant screening uses renter-optimized scores that can accurately evaluate the likelihood of making payments based on your credit history. These scores have been shown to reduce the number of losses due to bad debts and property damage more so than traditional credit scores. Additionally, property management market growth can be monitored through dynamic rent analysis. Advanced verification methods, created to protect against identity theft and fraud, are also available to landlords to help safeguard their rental properties.

The use of renter-optimized scores will help create a more equitable and fair environment for both landlords and tenants, and it will also assist landlords in complying with all aspects of the Fair Credit Reporting Act and other local regulations related to individualized assessment processes.

How Do Property Managers Prevent a Surge in Rental Application Fraud? 

• Document Inconsistencies

It’s essential to verify the authenticity of fake bank statements and pay stubs, as they can be shockingly easy to fabricate. You don’t need to be a forensic accountant to precisely screen your tenants with the aid of automated screening technologies now available in the market.

• Unverifiable Employers

A successful tenancy is based on the tenant’s capacity to pay rent. It is a non-negotiable to confirm their income and work status. To verify the applicant’s position, pay, and duration of employment, start by calling the company stated on the application. You should conduct an extensive tenant screening report for a more thorough financial picture. This combines comprehensive work and income data with a complete credit check from reliable bureaus. You can even do an international credit check on a foreign candidate to obtain the information you need to make a well-informed choice.

• Mismatched Details

High numbers of applicants and conflicting documents, such as pay stubs, IDs, and other supporting paperwork, increase the risk of application fraud. Property managers utilize an increasing number of layers of confirmation to identify inconsistencies early and address them appropriately. This includes discrepancies in names or other information across multiple documented records associated with an applicant.

Verify applicant records against various report sources and collect live data by contacting current employers to identify any significant discrepancies in the application. Additionally, property managers should routinely compare an applicant’s self-reported information with their bank transaction records, complete income tax forms for the past two years. They would also need to review previous tenant history and verify other relevant documentation to resolve discrepancies before approving an application.

Final Thoughts 

The dynamics of the U.S. residential market are largely driven by housing affordability, which has reached a critical level. Landlords and property managers now face an abundance of application fraud, as well as new regulatory pressures that didn’t exist years ago. As a result, tenant screening is now more important than ever to reduce the likelihood of evictions and fraud. This move also stabilizes rent payment collection despite the crisis. Dishonest tenant applicants can be detected easily with a clever strategy that combines effective policies, procedures, and technology, while maintaining fair access, all of which support the housing market.