Apartment households around the country continued to pay rent at a high rate in May, as the multifamily sector showed strength while the U.S. economy reopened further and COVID-19 cases declined dramatically.
In its monthly survey of more than 11 million apartment households, the National Multifamily Housing Council (NMHC) found that 94.6% partly or fully paid their rent in May, which was only a slight decrease from 95.1% in May 2020.
May’s rent collection results corresponded with the widescale reopening of businesses and strong employment statistics. The U.S. economy added approximately 559,000 net new jobs in May and the unemployment rate shrank to 5.8%, which is the lowest recorded rate since last March when a national emergency was declared for the pandemic, according to the Labor Department. In addition, weekly unemployment claims have continued to decrease and was 376,000 for the week ending on June 5, which was also the lowest rate since March 2020. Despite the recent uptick in hiring, there are more than 9.3 million job openings — the highest level ever recorded.
While the job market is booming, COVID-19 infections have declined considerably nationwide. On May 31, less than 10,000 new cases were recorded, a steep decrease from Jan. 8 when it set a high of approximately 310,000 new cases, according to data from the Centers for Disease Control and Prevention (CDC). More than half the population has received at least one dose of a COVID-19 vaccine, and 43.4% have been fully vaccinated, the CDC’s data indicated as of the publishing of this article.
Due to the reopening of the economy, rental demand has been strong, especially in the Sun Belt region, and rent growth has returned. Additionally, because multifamily was among the most resilient sectors during the pandemic, more institutional investors are targeting the space, making multifamily the most liquid asset class in the commercial real estate sector.
Although the federal and state eviction moratoriums for nonpayment of rent continue to be in effect, American households are still receiving rental and housing assistance from more than $55 billion of allocated funds between the second and third stimulus packages, which is expected to continue to be a tailwind for the multifamily industry.