Marcus & Millichap Research Brief: Eviction Moratorium
Eviction Pressures Abating as Economy, Labor Market Continue to Improve
August 2021 | Marcus & Millichap
Rising infections prompt moratorium extension. On Aug. 3 the Centers for Disease Control and Prevention enacted a new order halting residential evictions in counties with substantial or high levels of COVID-19 community transmission. As of Aug. 17, most counties in the U.S. met that criteria, effectively extending a ban on residential evictions that has been in place in one form or another since April 2020. Once the order expires, currently slated for Oct. 3, pending eviction proceedings can move forward. While 16 months of delays will inevitably lead to more eviction orders being filed than in a typical year, a mass wave of forced exits is unlikely.
Federal aid and job growth lower eviction pressure. Contrary to initial expectations, rent collections have held up fairly well during the health crisis. According to the National Multifamily Housing Council, 94.9 percent of renters made their monthly payment in July, less than 2 percent below the July 2019 measure. This metric suggests that rent delinquency is not significantly higher than in a more traditional year. Robust federal stimulus, including expanded unemployment insurance, were key early supports when mandated closures cut numerous service-related jobs. Since reopening, the employment situation has markedly improved. Unemployment is now at a below-average 5.4 percent, with a record 10 million jobs open for application. Delinquency will decline as more households gain income stability, although some slower-recovering markets, such as New York City and Los Angeles, face greater risks.
