Rent has been a contentious topic for landlords and tenants alike amidst the ongoing pandemic and substantial job losses sweeping the U.S. In April, the National Multifamily Housing Council (NMHC) reported that 78% of tenants had paid rent by April 6. Although a significant rental income loss, this is a far cry from some of the doomsday scenarios circulating the internet.
When compared to NMHC data from the same period in 2019, the rent revenue decrease isn't as alarming. On May 6, 2019, 81.7% of tenants had paid May rent, compared to 80.2% in 2020. The data sample came from 11.5 million rental units across the U.S., according to the NMHC.
According to the Bureau of Labor Statistics, the U.S. lost a total of 20.5 million jobs in April.
NMHC President Doug Bibby noted that "Despite the fact that over 20 million people lost their jobs in April, for the second month in a row, we are seeing evidence that apartment renters who can pay rent are stepping up and doing so."
Bibby further stated, "We expect May to largely mirror April, when the payment rate increased throughout the month as financial assistance worked its way to people's bank accounts."
In a separate survey released last week, Apartment List reports that in May, 31% of tenants made either a partial rent payment or none at all. Igor Popov, chief economist at Apartment List, notes "The majority of missed payments in early April were eventually made up over the course of the month."
Bibby succinctly summarized NMHC's position on what is ahead for real estate investors: "We are in uncharted waters and will be watching this closely over the course of the month as millions of households will not be able to access unemployment benefits, and those who have may find that they are not enough to cover rent plus all the other financial pressures caused by this crisis."
Similarly, Popov stated that "Despite May's affordability struggles, strong eviction and foreclosure protections and the gradual reopening of the economy are leaving Americans more confident about future housing security than they were last month."
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