Nearly one-third of American families have been unable to make full housing payments for July, a new survey has revealed as the US economy struggles to bounce back from crushing coronavirus losses.
The survey by Apartment List, an online rental platform, found that 32 percent of US households did not make their full July payments on time.
It marked the fourth month in a row with a ‘historically high’ number of households that were unable to make the payments on time and in full – up from 30 percent in June and 24 percent in April.
About 19 percent of survey respondents said they may no payment at all during the first week of the month, and 13 percent paid only a portion of their rent or mortgage.
In June, about 90 percent of households were able to pay some or all of their payments, but a large sum of those payments appeared to have been made at the end of the month, the Apartment List report found.
With late fees added on, the struggle to make payments is becoming a vicious cycle that’s likely to persist as the pandemic continues to surge.
‘Delayed payments in one month are a strong predictor for missed payments in the next,’ the report says, noting that 70 percent of households who were late in May were also late in June.
Renters, low-income and younger households were most likely to fall victim to the late payment issue.
Among those under 30 years old and those making less than $25,000 annually, the missed payment rate exceeded 40 percent in July.
Among renters, about 36 percent missed their July housing bill, compared to 30 percent of homeowners.
Americans hit hard by the economic slowdown during the pandemic had been optimistic that financial conditions would begin to improve as states around the country ramped up reopenings over the past two months.
However, the Apartment List findings indicate that the recovery is occurring much more slowly than expected, as spikes in coronavirus cases have forced some states to roll back reopening plans.
‘The economic fallout from the pandemic does not appear on track for the quick V-shaped recovery that many had originally hoped for,’ the report states.
The bleak trends are fueling American’s worries about evictions and foreclosures, particularly among renters.
From June to July, the share of renters who are either ‘very’ or ‘extremely’ concerned about being evicted rose from 18 percent to over 21 percent, the report found.
Over the same period, the share of homeowners concerned about foreclosure ticked up from 14 percent to 17 percent.
At the start of the pandemic short term displacement bans were put in place to keep people in their homes as unemployment skyrocketed to nearly 15 percent.
But many of those protections are nearing their expiration dates, while the unemployment rate stands at a slightly improved but still unsettling 11 percent.
Millions of households have been relying on the federal government’s one-time stimulus and $600 weekly unemployment checks to help cover essentials like housing. But many have now run out of the stimulus money, and the weekly checks are set to expire by the end of July.
The report concluded by saying that while reopenings and government aid have provided some relief, they’ve done ‘little to ease the housing payment crisis’.
It calls for local and state officials to extend displacement bans until the economy has more time to recover.
‘If local displacement bans are allowed to expire before local economies begin to recover, the missed payments we have been tracking over the past four months could lead to a wave of downgrade moves as renters and homeowners seek more affordable housing,’ it states.
The House of Representatives has also passed several measures aimed at relieving the housing crisis, including the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act and the Emergency Housing Protections and Relief Act of 2020.
However, neither of those bills is expected to pass through the Republican-controlled Senate.