In recent weeks, we have released the National Multifamily Housing Council’s (NMHC) rent payment tracker data (Part 1, Part 2, Part 3, Part 4, and Part 5) in an effort to keep investors informed. In this release, the data found that 90.8 percent of apartment households made full or partial payment by May 20th, 2020. This equates to a 2.2 percentage point decrease from the share of renters who made payment through May 20th, 2019, and compares to 89.2 percent or renters who completed payment by April 20th, 2020. The data was pulled from 11.4 million rental units across the country that vary by size, type, and average rental price.
The NMHC data details that apartment renters are completing their rent payment obligations when possible. Data released on May 20th, 2020 by the U.S. Census Bureau indicated otherwise. The Census Bureau’s Weekly Household Pulse Survey showed concern for the loss of income and housing security. 10.7 percent of adults reported being unable to pay rent or mortgage on time, while another 3.2 percent reported deferred payments. When asked about the likelihood of being able to pay next month’s rent or mortgage on time, 21.3 percent reported only slight or no confidence in being able to pay rent or mortgage on time. An additional, 2.5 percent reported next month’s mortgage is or will be deferred.
The CARES Act’s purpose was to ensure that people can complete their rent payment obligations, and for two months in a row, NMHC is seeing evidence that apartment renters are completing their rent payments. Overall, these results are solid for April and May, but it will be interesting to see how Q3 and Q4 will play out as operators begin to see impacts on their bottom line and cash flow as vacancy’s rise and non-payment of rent begin to add up.
While these numbers are a positive sign for the multifamily industry, NMHC continues to advocate for more legislation to provide relief for both renters and owners. Apartment owners have $1.6 trillion in outstanding mortgage debt, and if payment cannot be made, we may see a wave of multifamily foreclosures.
As the industry enters uncharted waters, we are closing monitoring the events which unfold surrounding COVID-19 and the impact on the economy and commercial real estate. Information is sourced from NMHC, who will be monitoring and releasing updated Rent Payment Tracker data weekly. Please be on the lookout for reports with updated information.
Matthews™ is committed to keeping the commercial real estate community informed and continuing to offer our services during these market changes. With updates and challenges released daily, please contact a Matthews™ specialized agent for guidance during this uncertain time, and for more insights on COVID-19 and CRE, visit our dedicated coronavirus website.
The Centers for Disease Control and Prevention is offering information and updates on the novel coronavirus (COVID-19) outbreak, the World Health Organization is tracking the number and location of confirmed cases of the virus and Building Owners and Managers Association International has provided the following emergency preparedness guidelines for commercial and residential property managers and landlords.