The biggest expense item in most household budgets is housing, a fact that is making itself known in a particularly unsettling way as the coronavirus pandemic and associated economic downturn enter a second year.
As of December, millions of renters and homeowners were struggling to keep roofs over their heads, according to a survey from the Mortgage Bankers Association (MBA). In fact, 5 million renters and homeowners missed payments that month.
Renters feeling more heat than homeowners
More than 2.6 million (8%) who reported missing or making late or partial payments in December were tenants. By comparison, nearly 2.4 million homeowners (5%) reported the same.
And those who are missing rent or mortgage payments are worried about what’s next. The survey found 2.3 million renters and 1.2 million homeowners felt they might be facing eviction or foreclosure — or the possibility of having to move in the next 30 days.
Sliver of good news as fewer renters, owners miss payments
There is some slight good news, however, as the number of late rent and mortgage payers was down from 6 million in September. This could indicate some easing of housing-related financial stress. (The second round of economic impact payments didn’t start going out until Dec. 29, so this likely wouldn’t have had a December impact.)
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Some property owners are extending a helping hand, as 12% of renters got the OK from their landlords to pay less or delay their monthly rent. Those property owners are also feeling the heat, but they, too, are getting some relief. Total lost revenues for landlords was $7.2 billion in the fourth quarter, down from $9.1 billion the previous quarter.
Unemployment insurance helped to ease renter and homeowner housing woes, but the president’s plan to extend enhanced unemployment benefits has yet to be passed. After more than doubling from 3% in April to 7% in September, the percentage of renters getting unemployment insurance slid slightly to 6% in December.
Methodology: The MBA’s Research Institute for Housing America (RIHA) used data from the Understanding America Study, which has been surveying the same set of more than 8,000 households throughout the coronavirus pandemic.