Investing.com -- Today, the Consumer Financial Protection Bureau (CFPB) published two reports examining national rental payment data from September 2021 to November 2024. The reports highlight a decrease in late payments, but also underline a rise in outstanding balances and late fees, indicating continued financial hardship among renters.
The percentage of renters who paid late fees in the past year reached a high of 23% in February 2023. Although this figure dropped to just under 14% in November 2024, the median outstanding rental balance increased by 60% during the same period, from $2,000 in September 2021 to $3,200 in November 2024. This suggests that despite fewer late payments, the financial distress among households that rent is escalating.
The average late fee amount has also seen a significant increase, rising to $85 in November 2024, a considerable hike from the average in September 2021. The data indicates that renters who incur late fees often pay multiple late fees in a single year, and only about half of the renters who fall behind on their payments manage to catch up within a month.
For the 35% of American households that rent, rent payments represent one of their largest expenses. Falling behind on these payments often signals financial stress and can put families at risk of eviction. The CFPB's reports show that even though fewer renters are incurring late fees and about half of those who do manage to return to on-time payments, the financial struggles for many renters persist.
The reports also reveal that 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.
In addition to late fees, the CFPB's reports also examine the incidence of non-sufficient funds fees and write-offs of unpaid amounts, further factors contributing to the financial burden on rental households.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.