Five million households did not make their rent or mortgage payments in December, and 2.3 million renters and 1.2 million mortgagors said they feel they are at risk of eviction or foreclosure, or would be forced to move in the next 30 days. That is according to fourth-quarter 2020 research released today by the Mortgage Bankers Association's (MBA) Research Institute for Housing America (RIHA).

The new fourth-quarter 2020 findings on housing and student loan payments come from RIHA's study,Housing-Related Financial Distress During the Pandemic, which was previously released in September 2020 (second-quarter findings) and October 2020 (third-quarter findings).

The percentage of homeowners and renters behind on their payments has decreased since last year's second quarter. In December, 7.9% of renters (2.62 million households) missed, delayed, or made a reduced payment, while 5.0% (2.38 million homeowners) missed their mortgage payment. The proportion of student debt borrowers who missed a monthly payment climbed to approximately 43% of borrowers in December from the steady share of around 40% since May.

"Gradual improvements in the labor market and economy helped more renters and homeowners make their housing payments at the end of 2020. However, the COVID-19 pandemic continues to cause financial stress for millions of Americans, and particularly for those who rent and have student loan debt," said Gary V. Engelhardt, Professor of Economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University. "Despite 5 million renters and homeowners not making their December payment, fewer believe they are at risk of eviction, a foreclosure, or would be forced to move in the next 30 days. This confidence is perhaps an indication that direct checks and enhanced unemployment benefits, rental assistance, mortgage forbearance programs, and a federal eviction moratorium have so far been effective in keeping people in their homes."

Added Engelhardt, "A rapid rollout of vaccines will hopefully slow the virus and lead to a larger reopening of the economy later this year. This would help the labor market and give affected households the opportunity to get back to work, resume their housing and student debt payments, and pay back past-due amounts."

RIHA Study - Fourth-Quarter 2020 Key Findings:

• Fewer renters and mortgagors, and more student loan borrowers missed payments in December.
• 2.62 million renters (7.9%) and 2.38 million (5.0%) mortgagors missed payments in December, down from approximately 6 million households who missed payments in September (8.4% of renters and 7.0% of mortgagors).
• 26.8 million student debt borrowers missed payments - an increase to around 42.5% of total borrowers (roughly 40% in last year's second and third quarters).
  
  
• Property owners continue to play a key role in helping renters: 
• 10.7% of renters missed one payment over the three quarters, 4.0% missed two payments, 2.7% missed three payments, and 5.4% missed four or more payments.
• 12% of renters received permission from their landlord to delay or reduce their monthly payment (by week).
• In aggregate, rental property owners lost as much as $7.2 billion in fourth-quarter revenue from missed rent payments. This was down from over $9.1 billion in the third quarter.
  
  
• Mortgagors were the least likely of the three groups to miss a payment over the past three quarters:
• 5.3% of mortgagors missed one payment, 2.0% missed two payments, 1.5% missed three payments, and 4.9% missed four or more payments.
• Around 18% of mortgagors received permission from their lender to delay or reduce their monthly payment (by week).
• In aggregate, total missed mortgage payments were estimated to be approximately $14.2 billion for the fourth quarter (vs. $19.4 billion for the third quarter).
  
  
• Approximately 2.3 million renters feel they are at risk of eviction or being forced to move in the next 30 days.
• On a weekly basis since August, between 6% and 8% of renters feel that they will be evicted or forced to move in the next 30 days.
• Up to 5% of renters who missed no payments over the last nine months feel they are at risk.
• Approximately 32% of renters who missed eight or nine payments in the last nine months feel they are at risk.
  
  
• Approximately 1.2 million mortgagors feel they are at risk of foreclosure or being forced to move in the next 30 days.
• On a weekly basis since August, between 2% and 3% of mortgagors feel that they will go into foreclosure or be forced to move in the next 30 days.
• 2% of mortgagors who missed no payments over the last nine months feel they are at risk.
• Approximately 10% of mortgagors who missed eight or nine payments in the last nine months feel they are at risk.
  
  
• Receiving unemployment insurance (UI) benefits:
• Renters - Rose from 3% at the beginning of April to 7% by the end of September. Unemployment has trended down very slowly since, to just over 6% in December.
• Mortgagors - Remained at around 3% since the beginning of April.
• Student debt borrowers - Rose from 3% at the beginning of April to 8% by the end of September. Trended slightly down to approximately 7% in December.
  
  
• Student debt borrowers were the most likely of the three groups to miss one or more payments:
• 14.4% of student loan borrowers missed one payment over the three quarters, 7.9% missed two payments, 6.3% missed three payments, and 28.4% missed four or more payments.
• The percentage of borrowers reporting missed payments (by month) was around 43% in the quarter (vs. 40% in the third quarter).
• In aggregate, 36.1 million individuals missed at least one student loan payment since the beginning of the pandemic.
• In aggregate, total missed student loan payments were estimated to be as much as $31.6 billion for the fourth quarter.

RIHA's research contains data from an innovative household survey from the Understanding America Study (UAS), an internet panel survey of over 8,000 households specially tailored to study the impact of the pandemic. Authored by Engelhardt and Michael D. Eriksen, Associate Professor of Real Estate at the University of Cincinnati, the study provides close to real-time economic data on the rapidly evolving financial consequences of the pandemic by following the same set of households from before the outbreak through the end of December 2020.

"This study provided a real-time picture of households' ability to make their housing and student debt payments in 2020, as well as their confidence in the near-term future," said Edward Seiler, Executive Director, Research Institute for Housing America, and MBA's Associate Vice President, Housing Economics. "The distribution of several effective vaccines will hopefully slow the pandemic. In the meantime, providing targeted relief for those facing hardships until the 'new normal' will be key to preventing wider disruption to the housing market and overall economic recovery."

MBA's RIHA is a 501(c)(3) trust fund. RIHA's chief purpose is to encourage and assist - through grants to distinguished scholars and subject matter experts, educational institutions, research facilities, and government organizations - establishment of a broader-based knowledge of mortgage banking and real estate finance. You can find additional studies on RIHA's website: www.housingamerica.org.