More than 6 million households did not make their rent or mortgage payments in September, according to a report from the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).
In addition, 26 million individuals missed their student loan payment.
In September, 8.5% of renters (2.82 million households) missed, delayed, or made a reduced payment, while 7.1% (3.37 million homeowners) missed their mortgage payment.
The proportion of student debt borrowers who missed a monthly payment has remained steady – at 40% – since May.
These factors, coupled with high unemployment, do not bode well for the housing market in the near-term.
“Rent and mortgage payment collections improved over the summer as more people went back to work, but high unemployment continues to place hardships on millions of U.S. households,” says Gary V. Engelhardt, professor of economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University, in the report. “There is growing concern that absent a slowdown in the number of coronavirus cases and another round of much-needed federal aid, millions of households in the coming months face the prospect of falling further behind.
“With the current eviction moratorium expiring in January, the situation could be even more challenging for renters. Many renter households across the country could find themselves with no place to live and no means to repay missed payments,” says Engelhardt.
“The tens of millions of student debt borrowers behind on their payments also has future ramifications for the housing and mortgage markets,” he adds. “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.”