Colorado tenants living in units owned by landlords with small portfolios were the nation's timeliest rent payers last month, helping to lift the U.S. average on-time payment rate to its highest since the pandemic started and signaling strength in the labor market and wages.

About 91.4% of Colorado renters paid their rent on time in February as Washington state came in at No. 2 with a rate of 91.1%, according to economic advisory and data science firm Chandan Economics' independent landlord rental performance report. Those were the only two states to have on-time rates above 90% for renters living in properties with 49 units or less.

Still, the average on-time rate across the country rose to the highest since the pandemic of 83.4%, according to Chandan Economics. Rent collections have been above 80% for 17 consecutive months and above 81% for the past five months.

“The strength of the labor market has continued to surprise in recent months,” the report said. “As a result, market-rate tenants have maintained their ability to meet monthly rent obligations, which should provide confidence in the vitality" of the U.S. rental housing market."

Chandan Economics' report looked at apartments and single-family rental properties owned by independent landlords, which includes individual investors, also commonly referred to as “mom-and-pop” owners.

The report can be used as a benchmark for those in the rental industry tracking the portfolios of smaller landlords, which are underrepresented in other market reports that mainly focus on institutional investors such as real estate investment trusts and pension funds, Chandan Economics said. Institutional owners typically hold properties with more than 100 units, according to Census Bureau data.

Small landlords in Mississippi dealt with the lowest on-time rent payments in the country out of the 31 states that met the small owner criteria in the report. However, Mississippi's on-time rate of 70.71% in February was up 4.47% from January. Maryland was next from the bottom with a 75.8% on-time rate for a 1.81% gain over January.

Indiana, which came in around the middle of the pack with an 83.2% on-time rate in February, had the highest percentage increase from January at 4.87%.

Florida, Iowa, Oklahoma and Virginia were the only states where on-time payments declined in February from the prior month, according to Chandan Economics.

California and Texas, the country's two most populous states, both performed above the national average with renters in California having an 87.2% on-time rate and those in Texas coming in at 85.3%. California's on-time rate was up 1.01% percentage points from January at a time when the Los Angeles area is the last major U.S. market to have an apartment eviction moratorium in place.

Higher on-time payment rates in February were correlated with higher rents, regardless of state. Those paying $2,000 to $2,499 per month had the best level at 86.1% in February. Renters paying more than $2,500 per month did so at a rate of 85.5%.

The lowest on-time rate was among renters paying $1,000 or less at 82.5% in February. Chandan Economics noted that those renters tend to have low credit scores but that end of the market had the highest percentage increase among price points, up 2.71% from January.

Miami and Orlando had the highest annual rent growth in the country through much of last year, with other Florida metropolitan areas among the top, according to CoStar data. A heavy spate of new construction has helped tame that rent growth.

But Florida markets are still high on the list of premiums renters are paying compared to historical annual average increases.

The Cape Coral-Fort Myers market has been at the top of the Waller, Weeks and Johnson Index created by researchers at Florida Atlantic University, Florida Gulf Coast University and the University of Alabama since Hurricane Ian destroyed thousands of homes in the area at the end of September. Miami is third on the index while Tampa is ninth.