Chris Merrill is in for Chip, joined by Jeff Tucker, Zillow economist.
Amid record unemployment, 12.4% of U.S. renters missed payments in the first two weeks of July, up from 9.9% last year. Missed payments are expected to increase after additional unemployment benefits expired on July 31.
A surge in missed payments has the potential to start a ripple effect felt by rental industry workers and others who rely on the rental industry. The average profit margin for a rental unit is 6.4% -- less than half what it was five years ago.
An estimated 53.8% of rental income is typically spent just on fixed costs of property ownership that landlords are responsible for (mortgage payments, property taxes, maintenance, insurance and capital improvements).
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