February 12, 2021
Every month, the National Multifamily Housing Council (NMHC) collects data from more than 11,000 multifamily buildings around the country. Data from late 2020 leading into early 2021 shows rental payments holding strong despite some drops.
2020 Rent Payment Strength
Predictions were grim about rental payment strength in 2020 once the pandemic hit the US in March, but the reality for the rental market wasn’t as bad as generally expected. However, there were still more households unable to pay rent and at risk of eviction than in previous years.
Based on estimations from the US Census Bureau’s Household Pulse Survey, there were between 9.7 and 14.2 million households unable to pay rent as of September 14th, 2020.
But, it’s not all bad news.
September was a turning point. From March to September, total rent payments had been decreasing. From September onwards, that trend reversed with total rent payments slowly climbing back up. Although still lower than YOY averages, the trend upwards is a positive sign for 2021.
2021 Current Data
According to NMHC’s data, there was around 88.6% fulfillment of rental payments by January 20th, 2021. This is down 2.5% from the same time frame in January 2020, and 1.2% below numbers from December.
Strong activity going into February 2021 shows that there’s still a lot of movement in the market that looks promising. Reports also showed that landlords with online payment systems had consistently higher rental payment percentages than those without online systems.
2021 Rent Payment Expectation
What will the rest of 2021 look like? It’s uncertain, but many experts remain optimistic about the future state of the rental market.
Two things stand out particularly:
In the US, there’s an ongoing rollout of COVID-19 vaccinations. The rollout is expected to take time and may not bring the economy back to normal for a while, but it’s a step in the right direction and may help to reduce unemployment and increase consumer confidence.
- Stimulus Packages
Both stimulus packages given out by the Trump administration in 2020 included some level of rental payment support and mortgage support. This did provide a temporary stopgap for many households. Halting of evictions also heavily impacted the market.The new administration has been discussing both additional short-term and long-term aid packages to stimulate the economy. These packages include both support for multifamily property owners and rental support for low-to-middle income households.
Extensions of the previous eviction moratoriums may disrupt the natural flow of the market, squeezing existing rental stock for a tighter market, but as unemployment lowers and the moratoriums begin to lift, the market will settle back in again.
Until then, rental payments are expected to remain healthy. While repayment will likely be lower than YOY numbers from 2019, it may top those of 2020 and may be stronger than previous estimates.
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