A new analysis from Freddie Mac Multifamily examined the effect of unemployment benefits and federal stimulus payments on the ability of residential tenants to pay rent during COVID-19 – and it contains some good news for landlords.
Freddie studied available benefits from April 2020 and looked forward to August 2021 to determine the impact of replacing the income of unemployed renters. The study assumes workers are eligible for both state unemployment benefits and federal stimulus payments.
Key findings include:
- In more than half the states, benefits nearly replaced pre-pandemic income.
- On average, between 30% and 40% of benefits would pay for a median-priced rental.
- Rent-burdened areas with higher median incomes receive less replacement income to put toward rent.
One example: Freddie Mac examined a hypothetical worker earning $40,000 in pre-pandemic income in Nevada, which has unemployment benefits similar to the national average. From April 2020 through August 2021, about 95% of that worker’s earnings would be replaced by state and federal unemployment benefits and stimulus checks.
The study also found that while some of the larger markets in the nation have been severely affected by the pandemic, nationally the apartment market has weathered the downturn well. Other indices seem to show that the sector is improving as well. According to the National Multifamily Housing Council Rent Payment Tracker, for example, 79.8% of apartment households made a full or partial rent payment by April 6 in its study of 11.6 million professionally managed apartment units across the country – a 1.9 percentage point increase over those who paid rent through April 6, 2020.