Fewer homeowners, more renters miss housing payments in the fall

New research from the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA) found that renters were about three times more likely than homeowners to miss payments in September and October of this year.

The share of homeowners who missed, delayed or made a reduced payment in September (3.2%) dropped compared to the shares who did so in June (4.6%) and July (3.8%) before rising again in October (3.8%). The share of renters who did so, on the other hand, has been on a steady uptick from July (8.6%) to September (9.6%) and October (10.9%).

“The economy and labor market continued to improve during the fall months, but the sunset of government support programs, inflationary pressures and rising COVID-19 cases were all likely factors in the upticks in missed housing payments in September and October,” said Gary V. Engelhardt, professor of economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University.

“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.”

The share of renters who received unemployment aid fell from 6% this past summer to less than 1% in October. Unsurprisingly, the shares of missed rental payments in September and October of this year also were higher than those in the same months one year ago (8.4% in September 2020 and 7.9% in October 2020).

Slightly more than 54% of mortgage borrowers who missed their June 2021 payment also missed their September payment. Among renters, this figure is just above 17%.

Since the beginning of the pandemic, RIHA estimated that missed rental payments through October 2021 totaled $52.5 billion, with missed mortgage payments through that same time frame at $83.9 billion.

Edward Seiler, MBA associate vice president and RIHA executive director, noted that the U.S. economy has improved, but more headway in Americans making their housing payments on time will depend on further financial progress moving forward.

“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,” Seiler said.


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