Late Payments Pile Up as Financial Strains Weigh on Renters

On-time rent payments by apartment renters have been on the decline since April 2023, illustrating the financial strains facing many renter households as US economic growth slows.

Despite a month-over-month improvement in August, on-time rent collections remain down substantially from a year earlier, underscoring that the financial health of renter households remains under stress.

At the same time, full rent collections—which include on-time and late payments — have fared better, pointing to a rise in renters paying late. The three-month moving average of late payments in independently operated rentals has risen consistently since the middle of 2024, climbing from a low of 8.8% to a high of 11.7% in June 2025.

The growing share of apartment renters playing catch-up on their monthly bills may speak to a broader undercurrent of distress. The seasonality of late-payments in recent years suggests that renters in mom-and-pop properties are sensitive to modest changes in monthly cashflow. Late payment rates have tended to drop off in the Spring, lining up with when most households receive their tax refunds. However, a sustained recent surge in late payments this year without the normal springtime improvement may indicate a structural misalignment of household cash flows, with a growing share of tenants relying on mid-month income to pay off overdue rent.

Between 2021 and 2022, rising inflation and slowing wage growth meant that the average American’s spending was growing faster than their income. When inflation eased in late 2022, income growth briefly pulled ahead. But since early 2024, expenses have once again been rising faster than earnings.

Compared to the early pandemic years, the income constraints felt by renters today are not as acute — nor are they as destabilizing to landlord incomes. Although wages have slowed, layoffs are not accelerating significantly, helping explain why many renters are eventually meeting their rent obligations even if it’s taking longer to get there. As noted in our August 2025 Rent Collections report, full payment rates have dropped since their January 2023 peak (-428 bps), but not as significantly as the drop in on-time payment rates (-502 bps).

Looking ahead, rising household debt and interest payments pose the most obvious risk to renters’ ability to keep up. According to the NY Fed’s Q2 Survey on Household Debt and Credit, non-housing debt grew by $40 billion quarter-over-quarter in Q2 after falling by the same amount in Q1. Over the same period, the rate of debt transitioning into 90+ delinquency has sharply climbed for all age groups.

As debt increasingly crowds out household spending on other items, renters are faced with a delicate balancing of financial priorities. Whether renters can maintain that balance will largely depend on the short-term path of inflation, rental affordability, and the US economy’s ability to remain on the positive side of growth.