Donate search
close
Listen Now The Erick Erickson Show streaming live arrow_right_alt close

Share

  • Facebook
  • Twitter
  • send Email
  • print Print

This Statistic Hints At A Worse Economy Ahead

A third of renters and homeowners missed their July payments.

The Coronavirus downturn has so far not spread to real estate prices but that may be about to change. A new statistic shows that the number of Americans who have missed housing payments reached a new high in July, extending the number of consecutive months of “historically high” missed housing payments to four.

The ApartmentList.com survey of renters and homeowners found that 32 percent had failed to make a full on-time payment in July. That includes 19 percent who did not make any payment at all 13 percent who made partial payments.

July’s total is marginally higher than May and June, which saw totals of 31 and 30 percent respectively. In April, the first month after the onset of the pandemic in the US, 24 percent of housing payments were missed.

Renters are so far more affected by the crisis than homeowners, but missing payments are at a critical level for both groups. Thirty percent of homeowners missed payments but a staggering 36 percent of renters were behind for the month. Unsurprisingly, low-income and young Americans are most impacted by this aspect of the crisis. Residents of medium and high-density urban areas were most likely to miss payments.

It is not clear how many residents have missed more than one payment but it is likely that quite a few Americans are now more than one month behind. This raises the prospect of a looming wave of evictions and foreclosures if the economy does not improve. The one-time assistance payments authorized in March having been spent long ago by those Americans on the cusp of financial ruin.

The share of missed payments increased despite many states reopening in June and many workers being recalled. As new virus cases surge around the country, the prospect of new shutdowns means that a the recovery will be limited for the foreseeable future. In Georgia, I’ve noticed that many businesses are closing or returning to limited service even without a new emergency order from the governor.

CNBC notes that a federal eviction moratorium was established in March. Other states and municipalities have also enacted moratoriums, but these programs are expiring. The federal guidelines expire in August and cover only about a quarter of renters. Even if the eviction bans are extended, many property owners will find it increasingly difficult to make their own mortgage payments if they can’t get money from their tenants.

Other deadlines are looming as well. Enhanced unemployment insurance expires at the end of July and the moratorium on layoffs for companies who took CARES Act loans expires at the end of September. Finances for many Americans are about to get much worse. More payments will be missed and renters and homeowners will slip further behind.

The bottom line is that the economy is not going to return to normal until people feel safe, despite the urging of political leaders. Most people aren’t going to feel safe until there is either a reliable treatment or vaccine or until the virus runs its course. None of those options is going to be reality soon.

Accepting that reality leaves the government with limited options. President Trump and Congress can either come together on another aid package or they can stand by and watch the country slip into an economic crisis that is likely to dwarf the Great Recession. Government handouts are not without costs and down sides, but, in the current health crisis, they seem to be the least-worst option.

If you would like to continue the discussion on social media, you can visit David Thornton’s Facebook page or follow him on Twitter.

Share

  • Facebook
  • Twitter
  • send Email
  • print Print

Advertisement

More Top Stories

Trump Threatens Executive Action On COVID Relief

It is unclear where the president believes this authority comes from.

SCOTUS Saturday: COVID Jail

Even though opinions are not being produced, we are still seeing the Supreme Court intervene in some matters as other cases continue in some courts. In a 5-4 decision along ideological lines, a stay o …

Falwell Can do What he Wants Because Liberty Would Rather be Close to Power Than Close to Christ. UPDATE: Falwell Takes Leave

The concluding assertion in Liberty University’s Statement of Mission and Purpose says this: Liberty University will… Encourage a commitment to the Christian life, one of personal integrit …