Apartment Rent Payments Start Slow (Maybe) in Early December
The National Multifamily Housing Council reports that 75.4% of households living in the country’s stock of professionally-managed market-rate apartment properties have paid rent for December as of the 6th.
The latest results are off by 7.8 percentage points from the 83.2% share of households making payments through December 6, 2019. While that’s a big difference year-over-year, it’s key to consider that the December 1-6, 2020 period included only four weekdays, whereas there were five weekdays in the year-earlier comparison period. Collection figures for the initial week of a month can move drastically due to where a weekend falls in the time span.
These findings come from the National Multifamily Housing Council’s Rent Payment Tracker research, compiling information provided by five technology firms, including RealPage, Inc., for more than 11 million market-rate apartment units.
A better gauge of the general health of rent collections activity probably comes from the final statistics for the month of November. Payments were received from 93.6% of the households at studied properties, off by a smaller margin – just 1.6 percentage points – from the November 2019 results.
The market remains vulnerable to a jump in missed payments, since some of those who are unemployed are meeting rent obligations with savings accrued when the CARES Act provided enhanced unemployment benefits. Those savings will be depleted over time. Furthermore, the scheduled expiration of additional financial assistance programs at the end of this month point out the need for another round of aid to keep households afloat financially.
Previous Patterns Hold in Property Class Payments
As has been seen since the COVID pandemic began, rent collections remain better in the upper-end and mid-range apartments than in the lower-tier properties. RealPage stats show payments for December through the 6th at 80.8% in the Class A block of product and 79.5% in the Class B inventory.
Collection levels are lower at 64% in Class C projects. It’s normal for payment activity to trail by an especially big margin in the initial week of a month. Many renters in these less-expensive apartments pay their bills by check, rather than electronic payment, and there can be delays in processing check payments.
Payment levels across metros proved especially wide-ranging in the initial week of December, lacking any particularly notable patterns. RealPage analysts will wait until results are in through the month’s second week before highlighting the best or worst performers.
