Non-Payment and Rent-at-Risk Increase
US Census data shows more US tenants did not make last month’s rent; their Rent-at-Risk for making August rent is also worse
The number of US renters reporting on the Census Bureau’s new weekly survey that they did not make last month’s rent increased. The most recent results for the survey that ended July 14 showed almost 22% did not make June rent payments. The survey that ended June 23 showed about 18% not did not make May rent payments.
More than 25% of renters didn’t pay June rent in 19 states. Only three states and the District of Columbia had fewer than 10% of tenants report not paying June rent: Utah, Maine, and New Hampshire.
Ten states saw the greatest increase in rent non-payment since May, with an increase of 10% points or more. Only Arkansas saw an improvement of more than 10% points.
Five of the top 15 metro areas saw 25% or more of renters not paying June rent: Miami, New York, Detroit, Riverside (California), and Chicago. Tech hubs San Francisco and Seattle are holding up the best with about 8% of tenants reporting not paying June rent.
Rent-At-Risk Worsens Ahead of August
The US Census Bureau survey has begun tracking the economic impact of COVID-19. It contains both current as well as forward-looking questions. Among the latter: how confident are you about paying next month’s rent? We have labeled this data Rent-at-Risk.
Rising Rent-at-Risk indicates fewer tenants are confident they will pay next month’s rent. Higher is worse. The following states saw the biggest increases in Rent-at-Risk from the June 23 to the July 14 surveys:
Many of these states’ numbers have suddenly relapsed. West Virginia, South Dakota, South Carolina, and North Dakota each had shown a reduction of 10% (or improvement) in their Rent-at-Risk in our last update.
The volatility in these states may be related to the increased spread of COVID-19 outside of the northeast US, perhaps reflecting the near-term uncertainty regarding continued unemployment benefits. The Rent-at-Risk for Florida and Mississippi, however, have seen reductions (or improvements) despite large increases in Corona infections. They are among the five states with more than a 10% improvement in their Rent-at-Risk.
Overall, Rent-at-Risk worsened nationwide by more than 2% from June 23 to July 14.
Among the largest metropolitan areas, Detroit and Riverside, California have Rent-at-Risk over 50%. Riverside’s dramatically worsening Rent-at-Risk contrasts with its trend from the June 23 survey. Then, Riverside had improved to 27.3% whereas it now has worsened to 53.4%.
Census’ Survey and Our Coverage
The Census Bureau receives more than 100,000 responses nationwide to its new Pulse survey. It is the first US leading indicator of ability to pay rent.
Going forward, we’ll continue tracking the impact of COVID-19 on multifamily rents. So far, we’ve released the following analyses based off of Census’ data series:
|Do REITs signal private market pain, too?
|Rent-at-Risk Rises Heading into July
|Rent at Risk: The Calm Before The Storm?
GeoPhy also incorporates this US Census Bureau data in Evra – our platform for assessing value and value drivers for commercial real estate properties and locations. Sign up for a trial of Evra to try it for yourself.