Could a new stimulus help Americans stay in their homes?

by Ryan Smith06 Aug 2020

For the fourth straight month, nearly one in three Americans missed their housing payments – but the situation could be at least temporarily alleviated through another stimulus package, according to a new study from Apartment List.

As eviction bans expire across the country, 32% of homeowners and renters failed to make their full housing payments on time, according to the study. More than 20% owed more than $1,000.

“In the first week of August, 11 percent of survey respondents made a partial payment of their monthly rent or mortgage bill, while an additional 22 percent have yet to make any payment whatsoever,” study authors Igor Popov, Chris Salviati and Rob Warnock wrote. “This continues a trend that has now lasted four months; the combined rate of missed and partial first-week payments has ranged from 30 to 33 percent going back to May.”

Each month so far, Apartment List found that many missed mortgage and rent payments were made whole with late payments by the end of the month.

“Nevertheless, by the first week of August, 10 percent of respondents had still failed to make a full payment for July,” the authors wrote. “As a result, unpaid housing costs are piling up for many Americans, renters and homeowners alike.”

The study found that 65% of homeowners with unpaid housing bills worried about facing foreclosure within the next six months, while 66% of renters in the same boat feared facing eviction within that time frame.

“With the recent expiration of most federal eviction and foreclosure protections and a lapse in expanded unemployment benefits, this insecurity is sure to deepen over the coming weeks,” the authors wrote.

At the beginning of August, 8% of homeowners had accumulated missed housing payments of under $1,000, while 11% owed between $1,000 and $2,000 and 13% owed more than $2,000, the study found. Meanwhile, 15% of renters owed their landlords less than $1,000, 11% owed between $1,000 and $2,000, and 5% owed more than $2,000.

“These accumulating missed payments affect renters and homeowners very differently,” the study said. “Some owners can defer payments through forbearance plans or even tack payments missed due to financial hardship onto the end of their loan period. Renters lack these options and the clarity that accompanies them.”

Could stimulus solve the problem?

“As congress continues to debate another round of stimulus, these data serve as an important indicator of the amount of assistance required to get Americans caught up on their housing payments (and potentially save thousands of families from losing their homes),” the study authors wrote.

According to the study, a stimulus check of $2,000 would be sufficient to meet the unpaid rent bills of 83% of renters who are currently behind on their payments. An additional $1,200 payment would alleviate half the nation’s outstanding housing debt.

“That said, a one-time payment does little to alleviate the underlying economic crisis causing this problem, so it is likely that housing debt would again accrue as widespread unemployment continues,” the study said.