01.25.21 - A new analysis from Mark Zandi, chief economist at Moody’s Analytics, and Jim Parrott, a fellow at the Urban Institute, shows that the average delinquent renter owes $5,600, being nearly four months or more behind on their monthly payment including utilities and late fees.
In total, an astounding $57.3 billion is owed by just more than 10 million renters amounting to 18% of renters. This exceeds the number of homeowners who lost their properties to foreclosure over a 5 year period during the subprime mortgage crisis over a decade ago.
The White House has extended the Centers for Disease Control and Prevention’s current eviction moratorium through the end of March, but that is unlikely to be long enough.
In total, an astounding $57.3 billion is owed. This includes all delinquent renters, not just those suffering financially due to the Covid pandemic.
The $900 billion relief package passed in December provides $25 billion for both renters and landlords. It is being disbursed by the states and can be used for past and present rent, as well as fees and utilities. Renters must show that they suffered financial hardship due to the pandemic, have incomes below 80% of their area median income, and are at risk of becoming homeless.
Zandi and Parrott’s analysis, however, shows that it is not even close to enough. If dispersed expeditiously, which is a big if, the $25 billion would bring the numbers down until April. By March about 6.3 million renters would be behind on payments, with total arrears of about $33 billion. Then the numbers would begin to creep up again.
“Eviction is a serious possibility. Lawmakers deserve credit for ensuring that these households did not lose their homes. But they need to do more. Soon,” Zandi and Parrott wrote.