Falling rents have yet to help these Americans get ahead
of ConsumerAffairsRecent data show the average rent has gone down over the last few months but that doesnt necessarily mean all renters are doing well. Two new reports from the Consumer Financial Protection Bureau showrenter households continue to face financial challenges.
The reports analyzed national rental payment data from September 2021 to November 2024. According to the agency, the reports reveal a complex picture of financial distress among renters, despite some positive trends in late fee occurrences.
According to the CFPB, the percentage of renters who paid late fees peaked at 23% in February 2023 but declined to just under 14% by November 2024. This decline suggests some improvement in renters' ability to meet payment deadlines.
However, the reports also highlight a significant rise in the median outstanding rental balance, which surged by 60% from $2,000 in September 2021 to $3,200 in November 2024. This increase indicates persistent financial challenges for many households.
Substantial financial burden
For the 35% of American households residing in rental properties, rent remains a substantial financial burden. Falling behind on rent payments often signals broader financial stress and heightens the risk of eviction.
While the data show that fewer renters are incurring late fees and about half of those who do manage to catch up within a month, the financial struggles for many remain evident.
The CFPB's analysis found that renters who incur late fees often face repeated financial difficulties. Nearly 60% of renters who pay a late fee end up paying multiple fees, with over 20% experiencing five or more late fees in the past year. The average late fee has risen significantly, reaching $85 in November 2024, up from previous years.
Additionally, the reports delve into the occurrence of non-sufficient funds fees and the write-offs of unpaid amounts, further illustrating the financial pressures on renters. The CFPB says these findings underscore the ongoing challenges faced by renters, even as some indicators of financial distress show signs of improvement.
Photo Credit: Consumer Affairs News Department Images
Posted: 2025-01-29 13:39:21
