More Renters Not Making Payments

More than 1 in 5 renters did not pay rent during the first week in July – the highest for any month since the coronavirus pandemic started in March in the United States, according to a report released Wednesday by Zillow.

The share of apartments households that did not pay any rent was 22.6 percent in the first week of July – up from 19.2 percent the first week of June. By July 13, the percentage who hadn’t paid fell to 12.4 percent – 2.5 percentage points higher than the same period last year.

“The rental market has been more affected by the coronavirus pandemic than the for-sale side appears to have been. The steady climb of the past few years has come to an end as rent growth has slowed nationally and prices have outright fallen in a few markets,” Zillow economist Joshua Clark said. “The saving grace has so far been government aid and eviction freezes, which have provided a lifeline for those who are out of work. But much of that aid has expired, putting many renters and workers who rely on the rental market continuing apace in a vulnerable position.”

Zillow notes that 2 million people continue to apply for unemployment benefits weekly and “recent estimates show half of all U.S. households have lost income during the pandemic, making it likely that government aid has played a crucial role in preventing the share of unpaid rent from ballooning even higher.”

“Much of that aid expired at the end of July, edging toward the possibility of a fiscal cliff that could cause unpaid rent figures to rise significantly in the coming months, barring a dramatic recovery in the job market. That is expected to have severe consequences for renters who are missing all or part of their paychecks and has the potential to start a ripple effect felt by many others who rely on the rental industry.”