Report finds that more renters are paying late, thus incurring late fees averaging $85
of ConsumerAffairsThe Consumer Financial Protection Bureau (CFPB) finds that renters are continuing to have a hard time paying their rent on time, and many are getting stuck with late fees averaging$85.
The agency issued two reports today looking at national rental payment data from September 2021 to November 2024. The percentage of renters who paid late fees in the last year reached 23% in February 2023.
While the rate declined to slightly less than 14% in November 2024, the CFPBs analysis found that the median outstanding rental balance rose 60% between September 2021 and November 2024, suggesting increased financial distress among affected households.
Renters who pay late fees often pay multiple late fees in a year, and the average late fee is $85, up significantly from September 2021. Only about half of renters behind on their rent catch up in one month.
Rent is a major expense
For the 35% of American households that live in rental housing, rent is one of their largest expenses. Falling behind on rent payments often indicates financial stress and puts families at risk of eviction.
While the data show that fewer renters are incurring late fees and that about 50% of renters who do incur a fee are able to bounce back to on-time payments, the data also reveal continued financial struggles for many renters.
The CFPB found a significant portion of renters who incur an initial late fee struggle to recover. Just under 60% of those who incur any late fees experience two or more. More than 20% of renters with at least one late fee have five or more late fees in the last twelve months.
Late fees have also risen, along with the median outstanding rental balance, have increased since 2021. Late fees have risen steadily since September 2021 to $85 in November 2024. The reported outstanding rental balance has increased sharply from $2,000 in September 2021 to $3,200 in November 2024.
The CFPBs reports also examine the incidence of non-sufficient funds fees and write-offs of unpaid amounts.
Photo Credit: Consumer Affairs News Department Images
Posted: 2025-01-28 19:58:10
