Americans could owe an estimated $7.2 billion in unpaid rent by December because of COVID-related job losses, Fed study shows
A new study suggests that Americans will owe billions of dollars in unpaid rent by December — but that could mean that the nation’s worst fears about the eviction crisis may not come to fruition.
Researchers at the Federal Reserve Bank of Philadelphia used payroll, joblessness and unemployment insurance data to create a more precise estimate of how many households nationwide are behind on their rent. The number they produced is far lower than the figures presented by other studies.
The researchers estimated that by December around 1.34 million renter households will be behind on their rent as a result of pandemic-related job losses, which equates to roughly 4.2% of all renter households. Altogether, these households will owe roughly $7.2 billion in rent by December, averaging to around $5,400.
These households include 2.8 million adults and 1.1 million children. The study also found they were more likely to be include people of color or have a woman as the head of the household.
Previous studies have estimated that as many as 40 million Americans were facing the threat of eviction because they had not managed to make full, on-time rent payments because of the coronavirus pandemic.
The difference in these estimates comes down to how researchers went about assessing who was behind on their rent. Some early studies made assumptions about which workers were most likely to be impacted by the pandemic based on the field they were employed in. Other studies based their estimates on survey data regarding people’s confidence in their ability to pay rent, essentially assuming that many people who were worried about missing their rent payment would indeed not make it.