In our prior blog, we observed that the likelihood of a homeowner with a mortgage to be unemployed is about 8 percent lower than a renter based on the Census Bureau’s Household Pulse Survey. We have some additional observations regarding the differences between homeowners and renters based on the same survey.
Renters are twice as unsure as homeowners in their ability meet their housing payments.
In Figure 1, we illustrate that since the end of April, about 12 to 15 percent of homeowners (with a mortgage) show little or no confidence in their ability to pay their next month’s mortgage. In contrast, during the same period, 28 to 34 percent of renter occupants showed little or no confidence in their ability to meet next month’s rent obligations. This implies that about 1 in 3 renters are at risk of eviction, which is particularly alarming given the expiration of the CARES Act on July 31st and the end of the $600/week in unemployment benefits that provided supplemental income. Fannie Mae and Freddie Mac have instituted a foreclosure and eviction moratorium, but uneven enforcement of the eviction moratorium is reflected in the lack of confidence amongst the renter community.
Figure 1. (click to enlarge)
Black homeowners are three times as unsure as white homeowners.
Relative to renters, homeowners exhibit a higher level of confidence but the disparity in confidence levels widens significantly when separated by racial groupings. Figure 2 illustrates the drastic difference in the confidence levels of white homeowners compared to Black and Hispanic homeowners. We found that Black and Hispanic homeowners are three times as unsure as white homeowners in their ability to pay next month’s mortgage. We observed that approximately one in ten white homeowners expressed a lack of confidence in their ability to meet next month’s mortgage. In contrast, for Black and Hispanic homeowners, three in ten were unsure about their ability to meet their next month’s mortgage. This racial disparity in confidence levels continued to exist among the renter households where white renters were twice as confident as their Black or Hispanic counterparts for meeting their rental obligations.
Figure 2. (click to enlarge)
Despite lower unemployment, insecurity among households has held steady.
We observed that for the ten-week period since April 2020, the percent of households with low confidence in their ability to pay their next month’s housing costs has been relatively steady. Despite the 3.6% improvement in unemployment rate from April to June, the confidence levels have been largely unchanged. We believe that the CARES Act has provided the security needed for those who have reported a higher confidence level in their ability to pay their housing costs. With the imminent expiration of relief under the CARES Act, we will continue to monitor the confidence levels among households as they meet the impending challenges.
 These percentages are calculated by adding together the number of households that have “No confidence” and “Slight confidence” in their ability to pay next month’s mortgage or rent. The total is divided by the total number of households subtracted by the number of households that are “Owned free and clear” or “Occupied without rent” because those households do not have a mortgage or rent payment that needs to be made.