Sun Belt Credit Stress And Rent Collections

Sun Belt credit stress is concentrating in Florida and Atlanta — and it's arriving before rent-to-income ratios say it should.

Four of the five earliest-stress metros are Gulf Coast Florida markets plus Atlanta — places where FICO scores are falling fastest quarter-over-quarter and past-due balances are accelerating over just six months, even though income growth and asking rents still look fine on paper. That's the tell: credit deterioration is outrunning the rent story, which means 2027 collections risk is building in markets landlords aren't yet flagging.

Rank	Stress Score	Label	FICO 3mo Chg (pts)	Past-Due Balance 6mo Chg (%)	Mortgage Delinquency 12mo Chg (pp)	Rent-to-Income Ratio (%)	MF Occupancy 12mo Chg (pp)	Retention Rate (%)
1	63.71	Elevated	-0.70	+23.17%	+1.41pp	35.64%	-2.73pp	65.7%
2	59.8	Elevated	-0.69	+20.25%	+0.62pp	47.37%	-1.88pp	66.6%
3	59.4	Elevated	-0.33	+24.02%	+1.17pp	32.86%	-3.68pp	67.2%
4	57.7	Elevated	-0.69	+20.40%	+0.96pp	29.88%	-2.39pp	66.5%
5	56.9	Watch	-0.43	+23.07%	+1.26pp	30.49%	-1.35pp	64.9%
6	55.8	Watch	-0.38	+6.58%	+2.97pp	28.13%	-3.58pp	67.0%
7	53.1	Watch	-0.41	+16.86%	+0.84pp	24.79%	-2.06pp	68.4%
8	52.6	Watch	-0.65	+20.97%	+1.09pp	29.34%	-4.12pp	65.3%
9	50.6	Watch	-0.43	+5.95%	+1.25pp	25.86%	-3.25pp	65.6%
10	47.9	Watch	-0.58	+4.10%	+0.61pp	27.23%	-3.64pp	67.0%
11	45.5	Contained	-0.26	+17.14%	+0.69pp	28.59%	-1.01pp	71.2%
12	44.4	Contained	-0.21	+9.56%	+0.32pp	29.14%	-2.17pp	69.5%
13	41.0	Contained	-0.01	+18.32%	+0.38pp	26.67%	-2.21pp	62.9%
14	31.9	Contained	-0.17	-1.71%	+0.15pp	30.59%	-3.64pp	65.3%
15	29.9	Contained	-0.13	-3.69%	+0.08pp	21.49%	-1.98pp	65.0%

Reading the top four

Tampa tops the list on the sharpest FICO deterioration in the pool — a 0.70-point drop in three months, the fastest of any Sun Belt metro tracked here — paired with past-due balances up 23% over six months . Miami's stress score is inflated less by momentum than by where it's starting from: it already carries the highest rent-to-income ratio in the set at 47.4%, deep into severe-cost-burden territory , so incremental credit stress there has almost no cushion before it shows up as missed rent. Orlando's past-due balances are growing fastest of the whole pool (+24.0% in six months) , and its occupancy has fallen 3.7 points over the past year — the steepest slide besides Charlotte's — meaning softening demand and rising credit stress are compounding rather than offsetting. Atlanta rounds out the top tier on broad-based deterioration: FICO down, past-due balances up 20% in six months, delinquency counts climbing .

Houston is worth a separate mention even at #6 — its mortgage delinquency rate jumped nearly 3 points over 12 months, the largest move in the pool , a signal usually tied to energy-sector layoffs rather than broad consumer stress, and worth confirming before treating it as systemic.

What this means for 2027 rent collections

The composite is built on short-horizon deltas (3- and 6-month) precisely because those move before the 12-month lagging indicators landlords usually watch — bad debt, eviction filings — catch up. In Tampa, Orlando, and Atlanta, current rent-to-income ratios (30-36%) are still in "moderate burden" range, not yet flashing on the rent side, so an operator underwriting collections risk off rent-to-income alone will miss the early signal these credit metrics are already giving. Miami is the exception: its 47% rent-to-income ratio means it's already at the ceiling, and rising credit stress there converts to collections risk with almost no lag — that's the market to underwrite the most conservatively on bad debt and turnover into 2027. Contained markets (Austin, Nashville, Phoenix, Las Vegas, Tucson) show FICO stabilizing or improving and past-due balances flat to declining, suggesting the resident base still has room to absorb rent growth — the standard flag there is Phoenix's below-average 63% retention rate, an operational rather than credit-driven risk.

Weights and pool

15 Sun Belt metros (AZ/TX/GA/NC/TN/FL/NV, population >700K), a stated boundary rather than a canonical one. Composite equal-weights four short-horizon credit deltas; thresholds (Elevated ≥57, Watch 47–57, Contained <47) split the pool 4/6/5 with no empty or dominant bucket.

I'd watch Tampa, Miami, and Orlando bad-debt lines first — that's where the composite and the credit velocity both point. The one thing that would flip this read: if Houston's mortgage delinquency spike proves sector-specific (energy layoffs) rather than broad-based, it drops out of the "earliest signs" conversation entirely.