Renters Were 3X More Likely To Miss Payments Than Homeowners In September, October

Renters were three times more likely to miss payments than homeowners during September and October, according to research from the Mortgage Bankers Association’s (MBA) Research Institute for Housing American (RIHA).

The study, titled Housing-Related Financial Distress During the Pandemic, found that the share of renters who missed, delayed, or made a reduced payment rose to 9.6% in September and 10.9% in October. In July, that number was 9.6%. 

The share of homeowners who missed payments declined in the same period, to 3.2% in September, though it rose again in October to 3.8%. In July, that number was 3.8%, while in June it was 4.6%.

Of those who missed their June rent, 17.2% also missed their September rent. Of homeowners who missed June, 54.2% also missed September.

The research found that delayed or reduced payments with landlord permission have been decreasing since the start of the pandemic, from 20% to about 10% in September. However, October saw an increase to more than 11%.

The housing shortage driving up home prices has also impacted the rental market. Bidding wars are increasingly common as renters who would otherwise buy a home are outbid or unable to find an affordable house, forcing them to stay in the renters market. August rent growth surpassed home growth for the first time ever in 35 out of the 50 largest U.S. metros. 

Real-estate investors have increased their home purchases in response to high rental competition. Investors purchased a record 90,215 homes in Q3 2021, totaling nearly $64 billion, up 80.2% YOY, the second-largest increase on record. Single-family homes made up nearly three-quarters of those purchases, an all-time high.

“RIHA’s research throughout the pandemic has provided a comprehensive picture for industry stakeholders and policymakers on households’ ability to make their housing statements,” said Edward Seiler, Executive Director, Research Institute for Housing America and MBA’s Associate Vice President, Housing Economics.

“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.”