Slightly under 5 million households did not make their rent or mortgage payments in the second quarter of 2021, according to updated research from the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).
Housing-Related Financial Distress During the Pandemic, RIHA’s study, found that 8.6% of renters (2.86 million households) missed, delayed or made a reduced payment in June 2021, while 4.6% of homeowners (2.19 million) missed their mortgage payment.
“Homeowners’ employment situation and ability to make their mortgage payments has meaningfully improved since the onset of the pandemic,” says Edward Seiler, RIHA’s executive director and MBA’s associate vice president of housing economics. “Most homeowners still behind on their payments are in a mortgage forbearance plan. For those still facing hardships once their forbearance plan expires, loan modifications, payment deferrals, and loan payoffs – through either refinancing or a home sale – are all options that could prevent a foreclosure.”
Since the onset of the pandemic in the second quarter of 2020, 6.8% of renters and 5.7% of homeowners have missed four or more payments. Missed rental payments now total $41.7 billion, and missed mortgage payments total $76.5 billion.
Slightly fewer renters and homeowners missed payments in the second quarter of 2021 compared to the first quarter. However, more renters and homeowners missed their June payment than their March payment. In June, 2.86 million renters (8.6%) and 2.19 million (4.6%) mortgagors missed payments, up from 4.53 million households that missed payments in March (7.2% of renters and 4.5% of mortgagors).
Homeowners were the least likely of the three groups to miss a payment since the second quarter of 2020: 85.4% of mortgagors made all their mortgage payments, 5.6% missed one payment, 1.9% missed two payments, 1.4% missed three payments, and 5.7% missed four or more payments.
On average, in the second quarter of 2021, 15.5% of mortgagors received permission from their servicers to delay or reduce their monthly payment (by week). In aggregate, total missed mortgage payments were estimated to be approximately $10.8 billion for the second quarter ($12.2 billion for the first quarter). Over the five quarters of the pandemic, aggregate missed mortgage payments have reached almost $76.5 billion.