In the midst of a national recovery from the COVID-19 pandemic, residential tenants across the country continued to pay their monthly rents at a high rate in July.
Approximately 93.3% of the 11.4 million units surveyed by the National Multifamily Housing Council made a full or partial rent payment by July 27. This was just slightly down from the 94.2% seen last month and 2 percentage points lower than the 95.3% of tenants that paid by July 27, 2019. However, it equaled the collection rate seen in May of this year and exceeded the rate in April, reflecting multifamily’s resiliency four months after the national emergency declaration.
It is widely believed that federal policies have helped bolster rent collections during the months of the outbreak. Due to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provided $1,200 stimulus checks for individuals and $2,400 for married couples, as well as a $600 bonus in unemployment insurance benefits, many households were able to meet their financial obligations, including rent. Additionally, forgivable loans issued by the Small Business Administration’s Paycheck Protection Program helped many businesses keep their staff employed, allowing those workers to continue paying their bills.
As of the writing of this article, Congress is negotiating an extension to the bonus unemployment insurance benefits and another round of stimulus checks for individuals and families. Experts believe these are important initiatives that will play a major role in helping people continue to meet their financial obligations as the national recovery continues. If, and to what extent, any measures by Congress may impact the real estate industry, including future rent collections, remains to be seen.
To date, much like in past times of financial disruption, the multifamily sector has continued to show resiliency compared to other asset classes, including retail, office and hotels, which have suffered considerably during the pandemic.
ArborCrowd is committed to updating our community with useful information during this time and we will continue to monitor the status of rent collections and other real estate fundamentals to help investors better understand the financial climate.