NEW YORK CITY- Multifamily has proved like any other asset class it is not immune to the effects of the coronavirus pandemic. However, it is still performing, even if it is haphazard. Despite the loss of income some renters face nationwide, they have been consistent in making March and April rental payments. On the other hand, some renters may get comfortable in rental housing as access to mortgage financing freezes up, proving favorable for the multifamily sector in the long run.
A recent National Multifamily Housing Council report found that 84 percent of apartment households made a full or partial rent payment by April 12th, up 15 percentage points from April 5th. In the grand scheme, 90 percent of renters made full or partial payments between April 1st through the 12th of last year, compared with 91 percent of renters on March 1st through the 12th this year, according to the NMHC. That is a payment rate of 93 percent compared to the same time last month.
Also, LeaseLock found that payments in April were only down 5 percent compared to January through March for renters that pay in the first 6 days of the month, according to a recent GlobeSt.com article.
“If you look at rent collections on multifamily, it’s not as bad as people thought it would look in April,” Richard Green, director of the USC Lusk Center for Real Estate, tells GlobeSt.com.
On the purchase side of the lending market, access to capital has grown more stringent and is barely existent for potential home buyers. According to data from the Urban Institute, for the 70 percent of people who could get a mortgage two months ago to buy a home, they can’t get that capital today and are likely to get stuck renting until the coronavirus pandemic loosens its grip on the U.S. economy, according to Green.
While there are assumptions to be made about the market, there is too much ambiguity around when the country will turn in the direction of stability, according to Green.
“To predict how many months this will last, we’ll have to know how the disease will play out , unless we get a treatment, vaccine or it dies out on its own accord, and even when that happens, than we’re looking at another year after that,” he said.