Personal Loans

Where People Are Deferring Rent Payments the Most

The COVID-19 pandemic has upended life for millions of Americans, especially those who are out of work or have been otherwise financially affected. While it’s possible to negotiate hospital bills or request forbearance on a loan, though, it might prove difficult for tenants to catch a break from their landlords.

In times of hardship, some landlords may agree to a rent deferment agreement to help tide their tenants over until they can come up with rent money. About 2.1% of all renting households had deferred rent for the previous month’s payment, according to a new U.S. Census Bureau survey. LendingTree researchers fielded the survey between May 29 and June 2, 2020 to determine where Americans are deferring rent payments the most, and found that tenants in some states fared better than others.

Key findings

  • Ohio topped the rankings, with 5% of all renters opting for deferment, more than doubling the national average. Nearly 102,000 renters here deferred rent last month. Assuming they deferred the entire rental payment, Ohio renters added about $81 million in debt in one month alone.
  • Maryland comes in second just slightly behind Ohio. About 4.9% of renters deferred rent last month, according to Census Bureau data. Average rent in Maryland costs $1,371 per month, so if 4.9% of renters deferred rent, the total amount deferred is more than $82 million.
  • Illinois comes in a close third place with 4.1% of renters deferring rent.
  • Surprisingly, not one person in Rhode Island reported deferring rent. Data showed that 159,836 paid rent on time and 17,613 paid rent late.
  • About 31% of renters have little to no confidence they will be able to pay next month’s rent on time, according to Census Bureau data. As the nation currently has a 13.3% unemployment rate, and the increased unemployment benefits from the Coronavirus Aid, Response and Economic Security (CARES) Act are scheduled to stop at the end of July, rental deferment may become more common.
  • Nearly 1% of renters say they already have plans to defer rent next month.
  • Deferment is not prevalent everywhere. Nine states had less than 1% of renters saying they deferred last month’s rent, while three had less than 0.5% of renters deferring.

Renters in some states deferred rent at higher rates

Looking at the map above, it seems that tenants in some Rust Belt and Midwestern states have been hit hard in terms of their ability to pay rent. Ohio, No. 1., saw 5% of renters deferring in the past month. Illinois, Indiana, Wisconsin and Michigan renters also deferred rent payments at higher-than-national rates.

One potential reason why Ohio tops our list is that local courts have been asked to delay evictions and foreclosures. This may have encouraged tenants and landlords to come to a compromise with deferment rather than nonpayment. There is also a housing emergency order in place for No. 2, Maryland, which stops renters from being evicted in the event of substantial loss of income.

Where tenants will owe the most debt in deferred rent to their landlords

When a tenant defers rent, that expense doesn’t just magically disappear. When you sign a lease with a landlord, you agree to make all payments, so a rent deferral typically just puts off your payment for a few weeks. This means that tenants are still indebted to their landlords, and in some states, tenants will owe their landlords a large sum of money.

California renters will owe upwards of $219 million by the time deferred payments are due, the highest sum across all states. Yet, the state has a relatively low proportion of rent deferrals, at 1.4%. This phenomenon is due to two factors: the state’s relatively high median rent of $1,520 and the state’s high population, which means that low 1.4% figure is equal to more than 144,000 renters seeking deferrals.

See the other states where tenants will owe their landlords the most money when the deferral period ends:

Top 5 states where renters stand to defer the most
  Percentage of renters deferring Number of renters deferring Median
rent
Estimated rent deferred, total
California 1.4% 144,213 $1,520 $219,203,760
Texas 2.5% 149,909 $1,046 $156,804,814
New York 2.2% 122,349 $1,274 $155,872,626
Florida 2.2% 107,384 $1,182 $126,927,888
Illinois 4.1% 83,203 $995 $82,786,985
Source: LendingTree
If you’re having difficulty making debt payments during this time, visit www.lendingtree.com/coronavirus for helpful resources on how to manage your finances and speak with your lender or credit card issuer.

Residents in these states reported rent deferrals at less than half the national rate

About 2.1% of tenants in America decided to defer their rent payment within the past month, our data found, but many states fared better than the national average. Tenants deferred rent at a rate of less than 1% in the following states:

States where renters deferred the least
  Percentage of renters deferring Number of renters deferring
Rhode Island 0.0% 0
North Dakota 0.3% 383
Nebraska 0.3% 995
Kentucky 0.5% 4,149
Alaska 0.6% 759
Idaho 0.6% 1,469
Hawaii 0.7% 2,500
Arizona 0.8% 11,803
South Dakota 0.9% 1,171
Source: LendingTree

This isn’t to say that tenants in these states are in the clear just yet. Even with just 0.8% of renters opting to defer in Arizona, for example, that’s still nearly 12,000 tenants. We estimate that tenants will be in debt to their landlords to the tune of $12.23 million when you consider the median rent of $1,036.

How rent deferrals vary across demographics

Unemployed tenants deferred rent at a higher rate than employed tenants

The coronavirus pandemic has put millions of Americans out of work, with a 13.3% unemployment rate in the workforce as of May 2020. Without a steady flow of income, it’s not surprising that unemployed renters are struggling to make ends meet. Unemployed Americans reported a 67% higher rent deferment rate than working Americans did, at 2.7% and 1.6%, respectively.

Asian Americans, Black Americans deferred at a higher-than-national rate

Rent deferment rates were also split among racial lines. White Americans were the least likely to defer rent payments, with Asian Americans being the group to most likely defer. At 4.6%, Asians were 2.2 times more likely to defer rent when compared with the nation as a whole.

  • Hispanic or Latino: 2%
  • White: 1.7%
  • Black: 3%
  • Asian: 4.6%
  • Two or more races, other races: 2.1%

A recent LendingTree study found that Black Americans saw less economic prosperity than the nation as a whole, specifically in areas of household income, wages and unemployment, all of which can affect a tenant’s ability to pay rent.

Parents were slightly more likely to defer rent than Americans without children

It costs a lot of money to have children. Parents with children were likely to struggle financially due to the coronavirus pandemic – in fact, 56% of parents with kids under 18 have gone into debt for coronavirus-related circumstances, a May 2020 LendingTree survey found. It’s only natural that parents are more likely than childfree Americans to defer on rent payments during the COVID-19 crisis.

Parents were 27% more likely than nonparents to defer rent in the past month, our study found. While 2% of tenants without children opted to defer rent, 2.5% of parents decided to defer.

Methodology

In order to rank the states where tenants are deferring rent the most, we analyzed data from the most recent U.S. Census Bureau Household Pulse Survey. The survey was fielded between May 29, 2020 and June 2, 2020. This figure was also compared to the median monthly rent to estimate the total amount of rent deferred. Data on median rent comes from the Census Bureau and is for 2018.

 

Get personal loan offers from up to 5 lenders in minutes