- More than 11 million Americans are behind on their rent and many could face eviction when the national housing protection expires in June.
- Housing advocates say the ban is lifting at a terrible time for property owners and tenants alike, with states still scrambling to distribute the $45 billion in rental assistance.
- Most at risk are people of color, those with low incomes and older Americans.
More than 11 million Americans are behind on their rent and many could be pushed from their homes when the national eviction ban expires in June.
The Centers for Disease Control and Prevention’s eviction moratorium, which has been in effect since September, will lift on June 30. Although the policy has been far from perfect at keeping renters housed, it’s reduced the normal number of eviction filings over the same time period by at least a half, according to Peter Hepburn, an assistant professor of Sociology at Rutgers University-Newark and research fellow at The Eviction Lab.
Experts say the number of evictions could skyrocket when the ban lifts. Around 15% of adult renters are not current on their housing payments, according to an analysis by The Center on Budget and Policy Priorities
“We’re going to see what we’ve been managing to stave off: this wave of evictions that is just going to crush some of these areas,” said John Pollock, coordinator of the National Coalition for a Civil Right to Counsel.
Rents Are Recovering
Cities are recovering. There is no longer a need to leave the city since the vaccines have stopped the spread of the pandemic. We are within a couple months of people returning to offices and restarting the much-dreaded work commute via public transportation. As we predicted, rent prices are improving as well. This is going to be a huge driver of core CPI in the summer.
As you can see from the chart below, as of May, the hardest hit markets have all recovered from their troughs in late 2020/early 2021. In fact, rents in New York are only down 12% from March 2020. The comps will be extremely easy this summer, meaning yearly shelter inflation will be very high. As we mentioned in a prior article, 5 small categories drove most of the core PCE expansion in April.
Narrative violation: Three of the five fastest rebounding apartment rental markets in the U.S. by price are in the Bay Area. pic.twitter.com/cTsCRfRTH2
— Paul Kedrosky (@pkedrosky) May 27, 2021
Obviously, shelter is a huge component of inflation. The Fed won’t be able to say small categories drove strong inflation this summer. However, they can still use the transitory argument. If you want to get philosophical, every single economic change is transitory. Nothing lasts forever. This is a great term for the Fed because it’s flexible. It allows the Fed to pursue whatever policy it wants.
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