Renters had a lot more to gain from the pandemic emergency social safety net programs than homeowners did—and now they also have a lot more to lose with many of those programs ending, according to a recent government report.
The finances of renters were propped up by emergency measures like temporary unemployment benefits and stimulus checks, while homeowners were less affected, a report last week from the Consumer Financial Protection Bureau shows, based on consumer credit data as well a pair of CFPB surveys. Credit scores for renters—who were more financially vulnerable before 2020 and harder hit by pandemic job losses—jumped up significantly after major aid distributions, the CFPB said. From the fourth quarter of 2019 to the first quarter of 2021, the average credit score for renters went up 21 points, while homeowners with mortgages saw a 12-point jump, and homeowners without mortgages experienced an 8-point increase.
The end of a federal eviction moratorium and the cessation of extra unemployment benefits has left renters’ finances in a particularly precarious state, especially with the impending end of student loan forbearance on Jan. 31, the CFPB said. On top of that, rents have been rising rapidly, and a federal pandemic rent relief program has been slow to distribute aid in many parts of the country.
On average, renters’ economic conditions were significantly more responsive to relief measures such as stimulus payments and changes in unemployment benefits,” the CFPB said in a release. “When these programs end, renters and their families may be at heightened risk.”
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