With the coronavirus pandemic continuing to take its toll across the United States and the number of cases surging in many areas nationwide, missed housing payments are emerging as a growing trend.
The National Multifamily Housing Council (NMHC) Rent Payment Tracker report, for example, found that 77.4% of apartment households made a full or partial rent payment by July 6. That’s down 2.3 percentage points from the share who paid rent through July 6 last year, and down 3.4 percentage points from the share that had paid by June 6 this year.
The share of apartment households making a full or partial payment by the 6th of the month had hovered above 80% for the previous two months. The NMHC had been touting renters’ ability to keep up with their rent payments throughout the pandemic, but with government benefits set to dwindle later in July, NMHC President Doug Bibby expressed concern that further missed payments could be coming.
“It is clear that state and federal unemployment assistance benefits have served as a lifeline for renters, making it possible for them to pay their rent,” Bibby said. “Unfortunately, there is a looming July 31 deadline when that aid ends. Without an extension or a direct renter assistance program, that NMHC has been calling for since the start of the pandemic, the U.S. could be headed toward historic dislocations of renters and business failures among apartment firms, exacerbating both unemployment and homelessness.”
Meanwhile, rental website Apartment List reported that a “historically high number of renters and homeowners” were unable to pay their full housing bill for the fourth straight month.
Apartment List’s data revealed that 32% of Americans couldn’t pay their full rent or mortgage bill during July’s first week, with 13% making a partial payment and 19% managing no payment at all. That’s up from 30% in June (11% partial/19% no payment) and 31% in May (9% partial/22% no payment).
Renters, according to Apartment List, struggled more than homeowners, with 36% of renters and 30% of homeowners failing to make full on-time payments. Most payments missed during the month’s first week continue to be made up late; 89% of respondents said that they had paid their June bill in full by the first week of July, closely matching with end-of-month payment rates for prior months.
The two studies have different methodologies (the NMHC tracker is based on a weekly survey of 11.4 professionally managed apartment units throughout the country, while Apartment List relies on a representative monthly survey of over 4,000 participants) and target demographics (the NMHC tracks only renters, while Apartment List’s survey targets both owners and renters), but both show troubling trends just as financial help for renters is set to expire. And while federal protections against evictions and foreclosures have been extended into August, more and more Americans are viewing the loss of their homes as a potential issue.
Asked by Apartment List about their level of concern about an eviction in the next six months, 9% of renters said that they were “very concerned,” while another 12% responded that they were “extremely concerned.” That’s up from 7% and 11%, respectively, in June. Polled on their level of concern about a foreclosure in the same timeframe, 8% of homeowners were “very concerned,” while 9% were “extremely concerned” — up from 6% and 8%, respectively, during the previous month.
There is real concern that eviction and foreclosure moratoria on various levels could end before renters and homeowners can get their financial ducks in a row, Apartment List reported. That could not only lead to people losing their homes, but also other ripple effects all over the multifamily market.
“If local displacement bans are allowed to expire before local economies begin to recover, the missed payments we have been tracking over the past four months could lead to a wave of downgrade moves as renters and homeowners seek more affordable housing,” wrote researchers Rob Warnock and Chris Salviati of Apartment List. “Already we are witnessing unprecedented declines in rent prices as demand for expensive housing wanes.”