More than 6 million households in the United States missed rent or mortgage payments and 26 million missed student loan payments in September as the economic effects of the Covid-19 pandemic stretched into their seventh month.
The Mortgage Bankers Association’s Research Institute for Housing America report released Friday found that 8.5 percent of renters – or 2.82 million households – missed, delayed or made a reduced payment. Another 7.1 percent of homeowners – or 3.37 million – missed mortgage payments.
Overall, the missed payments accounted for than $58 billion in revenue during the third quarter, the report found.
“Rent and mortgage payment collections improved over the summer as more people went back to work, but high unemployment continues to place hardships on millions of U.S. households,” said Gary V. Engelhardt, Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. “There is growing concern that absent a slowdown in the number of coronavirus cases and another round of much-needed federal aid, millions of households in the coming months face the prospect of falling further behind.”
The report found that among renters:
- Rental property owners lost as much as $9.2 billion in third-quarter revenue from missed rent payments.
- 11 percent of renters missed one payment over the last two quarters, while 4 percent missed two payments, 2.8 percent missed three payments, and 3.8 percent missed four or more payments.
- 13 percent of renters received permission from their landlord to delay or reduce their monthly payment.
For mortgages, the report found:
- Total missed mortgage payments were estimated to be as much as $19.4 billion for the third quarter.
- 4.7 percent of homeowners with a mortgage missed one payment over the two quarters, 2 percent missed two payments, 1.5 percent missed three payments, and 4.2 percent missed four or more payments.
- Around 20 percent of borrowerss received permission from their lender to delay or reduce their monthly payment.
On student loans:
- Total missed student loan payments were estimated to be as much as $29.5 billion for the third quarter.
- Student debt borrowers were the most likely of the three groups to miss one or more payments:
- 16.2 percent of student loan borrowers missed one payment over the two quarters, 8.8 percent missed two payments, 7 percent missed three payments, and 22.7 percent missed four or more payments.
“The tens of millions of student debt borrowers behind on their payments also has future ramifications for the housing and mortgage markets,” Engelhardt said. “Borrowers ending up in default would see an adverse effect on their credit, in turn making it potentially more challenging for them to rent or qualify for a mortgage.”