MBA Chart of the Week: Aggregate Back Rent Owed and Distribution of Households by Number of Missed Rent Payments for Households that Missed Rent in June (Aug 13 2021)

Last week the Research Institute for Housing America (RIHA), MBA’s think tank, released updated second-quarter 2021 results that allow us to assess how renters, mortgagors and student loan borrowers fared over the first 15 months of the pandemic. The updated analysis of the Understanding America Study (UAS) panel survey data, conducted by Gary Engelhardt of Syracuse University and Mike Eriksen of the University of Cincinnati, provides close to real-time economic data on the evolving financial consequences of the pandemic by following, on a weekly basis, the same set of households from before the outbreak.

Analysis of the UAS data shows that aggregate missed rental payments have trended down quarter-on-quarter since the beginning of the pandemic, with more than one-quarter of all missed rental payments in the second quarter of 2020—more than a year ago. During the second quarter of 2021, approximately 8.1% of survey respondents had a missed rent payment.

This week’s MBA Chart of the Week zeroes in on households who missed rental payments in June 2021. The chart plots a) the distribution of those households by the number of payments they have missed since the onset of the pandemic; and b) an estimate of the aggregate dollar volume of back rent owed by those households.

The 2.86 million households who missed June rental payments have missed an average of 6.2 payments since the onset of the pandemic, with mean cumulative back rent owed of $4,995 (or $14.27 billion in total). Examining the distribution of missed payments (blue line), a little more than 1 million of these households (37.5%) have missed 3 or fewer payments since April 2020, while 800,000 (28.1%) have missed 10 or more payments.

On August 11, The Wall Street Journal reported, “Since last December, Congress has appropriated a total of $46.6 billion to help tenants who were behind on their rent. As of June 30, just $3 billion had been distributed, though a senior official said the Biden administration hoped at least another $2 billion had been distributed in July.” Since the start of the pandemic through the second quarter of 2021, analysis of the UAS data shows aggregate missed rental payments of $41.7 billion, and approximately $31.6 billion of back rent owed as of the end of June 2021. Households that missed June payments account for $14.27 billion of the back rent owed, with the chronically late households in that group (more than 10 missed payments) owing $7.86 billion.

The distribution of the appropriated federal relief dollars is facing a host of challenges. Key among them may be the misalignment between when rent payments were missed and when the relief became available.

-Edward Seiler and Jamie Woodwell

Source: MBA Research Institute for Housing America (RIHA) tabulations of Understanding America Study (UAS) data.