Less Than 10% Of Homeowners And Renters Have Missed More Than Two Payments During The Pandemic

Slightly under 5 million households did not make their rent or mortgage payments in March 2021, an improvement from December 2020 and the lowest number since the onset of the COVID-19 pandemic, according to new first-quarter 2021 research released today by the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).

Housing-Related Financial Distress During the Pandemic, RIHA’s study, found that 7.7% of renters (2.56 million households) missed, delayed, or made a reduced payment in March 2021, while 4.9% homeowners (2.33 million) missed their mortgage payment. In addition, 26 million student debt borrowers (41.4%) missed payments, consistent with the steady monthly share of around 40% since March 2020.

Overall, 23.7% of renters and 14.2% of homeowners have missed at least one housing payment during the pandemic, but only 8.6% of renters and 6.8% of homeowners missed more than two payments. The study found that 37.1% of student debt borrowers have missed more than two payments.

“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.”

Added Engelhardt, “The economic forecast is brightening heading into the summer. 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.”

RIHA Study – First-Quarter 2021 Key Findings:

• Slightly fewer renters, homeowners, and student loan borrowers missed payments in March 2021 than in December 2020.
• 2.56 million renters (7.7%) and 2.33 million homeowners (4.9%) missed payments in March, down from approximately 5 million households that missed payments in December (7.9% of renters and 5.0% of homeowners).
• 26.0 million student debt borrowers missed payments – a small decrease to around 41.4% of total borrowers (from 42.6% in December). 
• Landlords continue to play a key role in helping renters:
• 76.3% of renters made all their rental payments over the last 12 months, 10.7% missed one payment, 4.4% missed two payments, 2.5% missed three payments, and 6.1% missed four or more payments.
• On average, in the first quarter of 2021, 9.8% of renters received permission from their landlord to delay or reduce their monthly payment.
• In aggregate, rental property owners lost as much as $7.85 billion in first-quarter revenue from missed rent payments. This was up from over $7.41 billion in the fourth quarter.
• Over the past year, aggregate missed rental payments have reached $35 billion.
• Homeowners were the least likely of the three groups to miss a payment over the past four quarters:
• 85.8% of homeowners made all their mortgage payments, 5.6% missed one payment, 1.8% missed two payments, 1.4% missed three payments, and 5.4% missed four or more payments.
• On average, in the first quarter of 2021, 16.0% of homeowners received permission from their lender to delay or reduce their monthly payment (by week). This was down from 17.8% in the fourth quarter of 2020.
• In aggregate, total missed mortgage payments were estimated to be approximately $13.2 billion for the first quarter of 2021 (vs. $14.5 billion for the fourth quarter of 2020).
• Over the first year of the pandemic, aggregate missed mortgage payments reached almost $68 billion.
• Receiving unemployment insurance (UI) benefits:
• Renters – Rose from 3% at the beginning of April 2020 to 7% by the end of September. UI benefits have trended down very slowly since, to just over 6% in the first two weeks of April 2021.
• Homeowners – The share has trended slightly down to approximately 7% in the first two weeks of April 2021.
• Student debt borrowers were the most likely of the three groups to miss one or more payments:
• 13.3% of student loan borrowers missed one payment over the last 12 months, 7.7% missed two payments, 5.5% missed three payments, and 31.6% missed four or more payments.
• In aggregate, 36.6 million individuals missed at least one student loan payment since the beginning of the pandemic.
• In aggregate, total missed student loan payments were estimated to be as much as $32 billion for the first quarter of 2021 and $123 billion in the first year of the pandemic.