With less than a month until election day, the COVID-19 pandemic and the resulting economic fallout continue to be defining issues of the campaign. Amid this continued volatility, we find that widespread struggles with housing costs have been troublingly stable since the start of the pandemic. And despite their pressing needs, we find that those who are struggling most are least likely to make their voices heard at the ballot box on November 3rd.
As summer transitions to fall, we exit what is traditionally peak moving season. But of course, nothing about this season has been traditional -- from March through June of this year, our national rent index fell quickly during the months when rents generally rise fastest.
Widespread difficulty with housing costs has been a troubling constant. Despite a slight improvement in this month’s data, 29 percent of Americans failed to pay their rent or mortgage in full during the first week of September, and 8 percent had not completed their August payment by the end of the month.
As the country continues to navigate the coronavirus pandemic and double-digit unemployment, many renters are still moving and looking for new homes to match their changing opportunities and lifestyles. Peak moving season was busy, but the economic slowdown that accompanied Covid-19 has tempered rent growth.
For the fourth straight month, roughly one-in-three Americans failed to make a full, on-time housing payment. Late and unpaid housing bills are accumulating, putting financial strain on many families and deepening concerns of near-term evictions and foreclosures. As federal and local eviction bans continue expiring across the nation, 32 percent of renters (and homeowners) entered August with unpaid bills. Over 20 percent owe more than $1,000.
It has become clear that the effects of the pandemic are far from behind us, and the economy does not appear on track for the quick V-shaped recovery that many had originally hoped for. While this economic weakness continues to be reflected in sluggish rent growth, our national rent index actually inched up slightly by 0.1 percent over the past month, the first monthly increase since the start of the pandemic. That said, year-over-year growth still stands at just 0.2 percent nationally, and many markets are continuing to see notable declines in prices.
While the coronavirus’s short-term impact on the housing market has already started to materialize in the form of softening rents, the long-term implications for the urban landscape are still far from certain and being hotly debated. One of the biggest outstanding questions is the degree to which COVID will shift preferences away from cities. Over the past several months, many consider the close quarters associated with urban density to be a liability, and many of the local amenities that city-dwellers love are shut down in compliance with social distancing requirements.
32 percent of Americans did not make a full on-time housing payment in July, up slightly from 30 percent in June. Missed payments continue to concentrate among renters, young and low-income households, and residents of dense urban areas. Compared to last month more Americans are concerned about evictions and foreclosures, even as federal and certain local displacement protections are extended.
Although shelter-in-place orders continue to loosen across the country, the number of new COVID-19 cases has begun to spike in recent days, signalling that the effects of the pandemic are far from behind us. And despite a surprising drop in the unemployment rate from April to May, a record number of Americans remain out of work, with new unemployment claims continuing to top one million per week.
In June, 30 percent of Americans missed their housing payments, down slightly from 31 percent in May but still up from 24 percent in April. Missed payments continue to concentrate among renters, younger and poorer Americans, and those who cannot work remotely.
Our national rent index remained essentially flat from March to April, following two months of gradual increases. This flattening is occurring at a time when rent growth is normally picking up steam due to seasonality in the market. From 2016 to 2019, month-over-month rent growth from March to April ranged from 0.2 percent to 0.7 percent. The fact that we’re seeing rents level off at a time when growth normally speeds up is likely reflective of the continued uncertainty surrounding the COVID-19 pandemic.