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Homeowners Struggling to Afford House Payments

BluePrint Realty
Apr 16 3 minutes read

Apartmentlist.com reported that an estimated 25% of U.S. residents could not afford to pay their rent and mortgage payments in April. 

Specific details shared by the website revealed that an estimated 13% of American renters were only able to pay a portion of their April rental fees. These households clearly fared better—but only by a bit—compared to the 12% that could not afford to make any payment at all toward their April housing bill.

Regarding homeowners, the amount of delinquent mortgages and missed payments mirrors that of U.S. renters. In response to these hardships that rendered renters and homeowners unable to pay, a reported one out of every nine landlords or management companies stepped in and lowered rents for the month of April.

The report also found that 45% of renters and 45% of homeowners were able to negotiate with their landlords and lenders and come to mutually agreeable reduced fees, or complete deferments for the month altogether.

The posting then delved into the different reasons for the delinquencies reported, most of which were dependent upon specific demographic factors. Among the most widely seen demographics that defaulted on their April payments included households with the least income coming in, as well as those homes or rentals of younger people. Among those most impacted by an inability to pay in April were the inhabitants of households located in largely populated, metro areas of the nation.

According to the report, the virus’s devastation is far from being over, with even those renters and homeowners who were able to make their April payments highly doubting that they will continue being able to do so in the coming months.

The Mortgage Bankers Association (MBA) recently revealed that the number of home loans in forbearance rose from 2.73% to 3.74% during the week of March 30 to April 5. 

Mortgages backed by Ginnie Mae had the largest weekly growth of 1.58% and the highest overall share in forbearance requests (5.89%). 

"The nationwide shutdown of the economy to slow the spread of COVID-19 continues to create hardships for millions of households, and more are contacting their servicers for relief in accordance with the forbearance provisions under the CARES Act," said Mike Fratantoni, MBA's SVP and Chief Economist. "The share of loans in forbearance grew the first week of April, and forbearance requests and call center volume further increased. With mitigation efforts seemingly in place for at least several more weeks, job losses will continue and the number of borrowers asking for forbearance will likely continue to rise at a rapid pace."

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