Invest in You: Ready. Set. Grow.

Only about half of Americans are confident they can pay full rent in May: Survey

Share
Key Points
  • 52% of American renters say they are confident they will be able to pay full rent in May, compared to 69% who said they could in April, according to a new survey, but those numbers could change as more federal stimulus checks hit bank accounts.
  • 63% of renters said they have suffered income losses related to Covid-19.
  • A significant percentage of renters plan to move within six months.
A view of an apartment building in the Chelsea neighborhood of Manhattan, New York City. 
Drew Angerer | Getty Images

As job losses and unemployment continue to increase as a result of the coronavirus pandemic, more than half of Americans who rent their residence say they lack confidence they will be able to pay May rent in full.

That's according to a new survey that finds 12% of renters do not expect to pay rent at all during May; 15% expect to pay partial rent in May. Another 21% said they don't know yet.

The percentage saying they are confident they will have the funds for full rent (52%) was lower than the 69% who said they could pay April's rent.

Income losses related to Covid-19 have hit 63% of renters across the nation, with 48% describing the losses as "devastating."

Four in 10 renters said they plan to move in the next six months, according to the survey, which was conducted April 10–16 among 20,000 Americans by Apartments.com and Grace Hill, a property management technology and education provider. 

The survey's authors said at least part of the response may be attributable to federal stimulus checks reaching fewer than half of Americans by mid-April. Among those who were unsure whether they would be able to pay, 75% said they plan to use the stimulus to pay rent. Among all respondents, 60% planned to use the stimulus to pay rent. The study's authors also stated that anxiety over a potential job loss may have contributed to uncertainty about making rent. 

Over 26 million have filed for unemployment since states began shutting down, with many facing layoffs during the second half of March. As April 1 approached, campaigns calling to cancel rent and mortgage payments arose due to the uncertainty many have been experiencing. The online trend, "rent strike," began along with hashtags #CancelRent, #KeepYourRent and #FoodNotRent.  

VIDEO3:3403:34
Invitation homes CEO on renter protection amid the coronavirus crisis

Many Americans had some relief when the IRS deposited stimulus relief checks to those who were eligible the week of April 13. The CARES Act, a $2 trillion stimulus package passed by Congress, gave homeowners with federally backed loans two financial relief options, and for renters the act and many states and cities have banned evictions during the health pandemic.

"This is a very overwhelming time for renters, and I think they are worried about surviving and keeping a roof over their heads," said Dru Armstrong, CEO of Grace Hill.

Kellogg Business School professor Adam Waytz, who is familiar with the survey, said one thing that stood out in the data was that the people hardest hit by the coronavirus crisis were the least familiar with the CARES Act. "A significant percentage of people who said they had experienced an income loss (compared to those who did not experience an income loss) reported no familiarity with the CARES Act. I would recommend that they educate themselves and work with property management companies to get to know more about relief programs," he said.

Even though evictions have been banned, some renters are still worried about late fees.

'It is all about communication'

"Communication is the most important thing during this whole uncertain time. Renters need to make sure they are communicating with their property managers about their current situations," Armstrong said. "And we are telling all of the companies we are working with to practice empathy." 

Armstrong said many apartment complexes are making the effort to be understanding with tenants.

"People are not navigating through a tough economic issue, but a serious health crisis as well. And it is important everyone remembers that," she said.

"We've changed our wording and tone in our letters to renters, and we've also implemented payment plans for those who need a little extra time," said Courtney Gordon, senior vice president at property manager Rise Residential. "Our property employees are calling renters to just check on them and make sure they are okay, because this is a stressful time." 

Renters are advised to give their landlords notice if they won't be able to make rent or need to work out a payment plan.

Gordon said Rise Residential has worked out various payment plans with their renters.

"It is all about communication. As long as you explain to your property manager when you will be able to pay the full amount, they should understand," Armstrong said. "One of the things we are seeing is property management companies trying to keep pace with all the changes and update their policies and train their teams on what those policies are," Armstrong said. "What may have been true a month ago or even a week ago is probably not true anymore."

More from Invest in You:
If money is keeping you awake at night, these 5 small financial moves can ease the tension
People save as much as 73% more when they know this simple trick
If you think your job is on the chopping block, here's what to do

Armstrong said this dynamic situation includes increase in stimulus checks hitting bank accounts which would improve renter's confidence, and the apparent flattening of curves in some places.

"But we're not sure how much it would improve the situation," she added. "Our findings found tremendous confusion about federal stimulus, and renters appear to be taking an attitude of believing it when they see it."

Reopenings of states across the country will also be key to the outlook.

"It may lead more people to feel hopeful about their situation," Armstrong said. "We found renters want to pay their rent and don't want to fall behind if they can help it. If more certainty begins to take shape, we think that will move the numbers. ... This whole situation will continue to evolve, and reopening of certain states is the next question mark," she said.

SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox.

CHECK OUT: 6 reasons why you might not have received your stimulus check yet — and what you can do about it via Grow with Acorns+CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.