Third Of Renting Americans Worried About Next Payment As 'Recovery' Hopes Fade

Tyler Durden's Photo
by Tyler Durden
Thursday, Jun 11, 2020 - 09:16 AM

An alarming number of Americans are having trouble making rent payments amid a period of high unemployment and an unfolding depression across the U.S. At least 17% didn't pay their latest monthly rent and an even larger number of folks are worried about missing upcoming rent payments as the squeeze on households is getting worse, reported Bloomberg, citing the U.S. Census Bureau's Household Pulse survey.

Census Bureau's Household Pulse survey showed in the last five weeks through June 2, 31% of households said they had "little or no confidence" about paying rent next month. 

The survey showed 11% of households with a mortgage skipped servicing payments last month, and 16% said they wouldn't be able to make payments in the future.

The consumer is in rough shape, despite President Trump touting of a V-shaped recovery and how the stock market is at record highs -- households, mainly ones of the bottom 90% -- are getting absolutely crushed in this downturn. This sets the stage for a consumer that died with a bang: because in a time of virtually no visibility on job prospects, economic recovery, and how the pandemic is resolved, consumer behavior suggests winter is here

"Households who suffered a loss of income due to Covid-19 may be reducing their spending on non-housing goods/services in order to make their rent or mortgage payment," said Shawn Bucholtz, an economist with the U.S. Department of Housing and Urban Development.

Federal Reserve Chair Jerome Powell said Wednesday that he has told lenders to offer distressed consumers forbearances on their debt payments.

"There's been a tremendous amount of forbearance on the part of the banks," Powell said during a press conference. "But those are not decisions that we hold any legal authority to make, and by the way, we have encouraged those decisions."

So how long until people can afford to pay rent and mortgages again? Or better yet, how long until people can start spending? The answer is that nobody knows, but one thing is certain: there can be no V-shaped recovery this year.  

Our advice to Americans: the economic storm is not over