Compared to the retail or hotel/lodging commercial real estate market, the multi-family market is faring relatively well, according to NAR’s July 2020 Commercial Market Insights report.  However, the lower-end segment of the apartment market has not escaped the impact of the coronavirus pandemic, with 20% of renters failing to pay or deferring rent in May 2020.

According to the US Census Bureau’s Household Pulse Survey, about 18% to 20% of adults 18 years old or over who lived in rental housing have not paid or deferred rent in the past month. Base on the June 18-23 survey that asks about payment of last month’s rent, 19% reported they did not pay or deferred rent payment in May, double the 10% share of renters who missed or deferred rent in March.

Line graph: 19% of Renters Missed or Deferred Paying Rent

Rent collection is an issue that is hitting renters and landlords in the Class B/C apartments. Of the renters who did not pay rent, nearly 80% had a household income of less than $50,000, with at least one in five not paying or deferring rent. On the other hand, less than 5% of renters with a household income of at least $100,000 did not pay or deferred rent.  Nareit also reported that REITS received 97.5% of the typical rent in June, up from 89.9% in April. REITS own or operate apartments with a higher quality tenant base.

Bar chart: Distribution of Household Income of Renters Who Did Not Pay or Deferred May Rent Payment
Bar chart: More Than 20% of Renters in Households with Income Less than 50,000 Missed or Deferred May Rent Payment

The state unemployment insurance and the additional $600 weekly benefit is helping the unemployed pay rent or mortgage. The $600 benefit expires on July 31. By industry, the $600 and state unemployment benefit has more than replaced the lost wages among workers in leisure and hospitality, retail trade, and other services, which account for about 35% of those claiming unemployment insurance.

Table: Unemployment Claims by Industry

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.