More than a third of U.S. renters have lost confidence in their ability to keep up with rent payments in the future, according to a Census survey, as the enhanced unemployment benefits of the federal CARES Act expired in July with millions of Americans still out of work.
Renters expressing no confidence or only slight confidence in payment ability hit its highest rate the final week of the Census Bureau’s Household Pulse Survey. About 35% of respondents fell into these two categories in the week-ending July 21, compared to the low of 28% six weeks earlier.
The Household Pulse Survey was conducted online over 12 weeks beginning April 23. The survey drew responses from millions of Americans each week about how the COVID-19 pandemic has impacted their households from a social and economic perspective.
In general, renters expressed more confidence in May and June, in the weeks after most people received their $1,200 federal stimulus checks and the $600-a-week unemployment benefits payments began making their way into the pockets of millions of unemployed Americans. Nearly half – 47% – of survey respondents during the week of June 4-9 expressed “high confidence” in their ability to pay rent. By the week-ending July 21, only 38% of respondents reported high confidence.
Despite waning confidence in recent weeks, apartment renters have managed to keep up with their rent obligations. About 79.3% of professionally managed apartment households paid rent by August 6, the National Multifamily Housing Council reported. Since April, monthly rent payment numbers have consistently come in only about 1 to 2 percentage points below what they were a year earlier.
With unemployment remaining in double digits in July, many households likely paid August rent with money accumulated in July, so it’s not surprising that payments didn’t falter immediately at the point when enhanced unemployment benefits ran out on July 31. However, most who are unemployed now face a big cut in the benefits they will receive going forward, casting uncertainty around future rent collections.
In the final week of the Census survey, of the approximately 73 million renters who responded, 20% planned to use unemployment insurance benefits to pay rent. Another 24% planned to use stimulus payments, compared to about 59% who planned to use regular income sources like those before the pandemic.
Given that so many renters cite dependence on unemployment benefits and stimulus money, it makes sense that the expiration of such benefits has caused confidence in rent payment ability to slump.