WASHINGTON– More than six-million households failed to make their rent or mortgage payments in September, according to a new analysis released by the Mortgage Bankers Association's Research Institute for Housing America, indicating the economic fallout from the coronavirus pandemic is hitting a growing number of Americans.
Despite that number, in the third quarter, the percent of homeowners and renters behind on their payments fell slightly from the prior quarter, but the overall amount remains troubling, according to a number of analysts.
The MBA reported that during September, 8.5% of renters, or 2.82 million households, missed, delayed or made a reduced payment, while 7.1%, or 3.37 million homeowners, missed their mortgage payment.
Renters receiving unemployment benefits rose from 3% in early April to 7% by the end of September. Mortgagers getting jobless aid remained unchanged at 3% during that time span.
"With the current eviction moratorium expiring in January, the situation could be even more challenging for renters,” Gary V. Engelhardt, professor of economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University, told USA Today. “Many renter households across the country could find themselves with no place to live and no means to repay missed payments."
In September, the Trump administration implemented a national moratorium on residential evictions through the end of the year. The moratorium, which will run through Dec. 31, applies to individuals earning less than $99,000 a year and who are unable to make rent or housing payments.
As CUToday.info has reported, Republicans and Democrats have been deadlocked for months over passing a new coronavirus stimulus package.
Student Borrowers Fall Behind
Meanwhile, it isn’t just mortgage borrowers who are behind on payments. During September, approximately 26 million people missed their student loan payment. The proportion of student debt borrowers who missed a monthly payment has remained steady at 40% since May, USA Today said.
Student debt borrowers receiving unemployment rose from 3% in early April to 8% by the end of September. In August, the Trump administration extended relief from March and suspended student loan payments, stopped collections and waived interest on federally held student loans until Dec. 31.
That relief, however, doesn't cover private student loans. Most student loans, or about 92%, are owned by the U.S. Department of Education, according to MeasureOne, an academic data firm. Private student loans make up 7.87% of the total outstanding U.S. student loans, USA Today said.
“Borrowers ending up in default would see an adverse effect on their credit, in turn making it potentially more challenging for them to rent or qualify for a mortgage," Engelhardt added.