Approximately 4.9 million households did not make their rent or mortgage payments in March, according to new research released by the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).
That’s slightly down from 5.0 million households in December to reach the lowest number since the COVID-19 pandemic began. Some 4.9% of homeowners — approximately 2.33 million households — missed, delayed or made a reduced payment on their mortgage in March. Homeowners fared better than renters, with 7.7% of renters, or 2.56 million households, missing, delaying or making a reduced payment.
“The rapidly improving economy and labor market, increased vaccination rates, and promising trend of declining COVID-19 cases all bode well for those who are still facing unemployment or underemployment because of the pandemic,” said Gary V. Engelhardt, Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. “However, millions of families are still facing economic distress, despite improving conditions since last March.”
Overall, 23.7% of renters and 14.2% of homeowners have missed at least one housing payment during the pandemic. Just 8.6% of renters and 6.8% of homeowners, however, have missed more than two payments.
Many households have been aided by support from their landlords and lenders, several of whom have worked with renters and homeowners to come up with feasible payment strategies during the tough economic times. During the first quarter 9.8% of renters received permission from their landlords to reduce or delay their monthly payments, while 16.0% of homeowners received similar permission from their lenders. Such concessions have not come without cost: In aggregate, rental property owners have lost as much as $7.85 billion in first-quarter revenue from missed rent payments, up from $7.41 billion the quarter prior. Likewise, the MBA estimated total missed mortgage payments for the first quarter at about $13.2 billion, down from $14.5 billion in the fourth quarter of 2020.
Over the past year, aggregate missed rental payments have totaled $35 billion, while aggregate missed mortgage payments have added up to $68 billion.
Still, with the economy and labor situations improving, Engelhardt expressed further optimism that the payment collection picture will continue to improve as the year goes on.
“The economic forecast is brightening heading into the summer,” he said. “Getting closer to consistent, pre-pandemic levels of economic activity and employment will allow households the ability to resume their housing and student debt payments and pay back past-due amounts.”