How many renters and homeowners are missing payments?

Some households continue to struggle as expiration of COVID relief programs looms

Renters were three times more likely than homeowners to miss payments in September and October, according to newly released research by the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).

The study revealed that the share of renters who missed, delayed, or made a reduced payment rose from 9.6% in September to 10.9% in October. That’s compared to 3.8% of homeowners who missed payments in October, up from 3.2% in September.

Gary Engelhardt, professor of economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University, said the uptick in missed housing payments during the period was likely a result of several factors, such as the expiration of federal forbearance programs, inflationary pressures, and rising COVID-19 cases.

“Renters were three times as likely to miss a housing payment compared to homeowners and appeared to be vulnerable to the expiration of expanded pandemic unemployment benefits,” Engelhardt said. “The share of renters who received unemployment fell from 6% over the summer to below 1% in October.”

Since the start of the pandemic, the missed rental payments through October were estimated to be roughly $52.5 billion, while missed mortgage payments totaled $83.9 billion. Other key findings of the RIHA study include:

• The percentage of renter households receiving permission from their landlords to delay or reduce payment has declined from nearly 20% in the second quarter of 2020 to approximately 10% in September and 11% in October.

• The share of renters who received unemployment insurance benefits dropped sharply from 6% in Q2 2021 to 1% in September and October.

• Among the households who missed their September mortgage payment, 58% had someone in the labor force.

• The share of homeowners who received permission from their lenders to delay or reduce payments has trended down from 25% in May 2020 to approximately 12% in September and October 2021.

• The percentage of homeowners who received unemployment insurance benefits continued to decrease to just over 1% in October 2021.

“The overall economic outlook looks brighter but still greatly depends on the course of the virus. Continued job growth and wage gains – especially if they can offset inflation – are key to helping those households that are still facing hardships,” said Edward Seiler, executive director of RIHA and MBA’s associate vice president of housing economics.