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Get 50% off your first order of CookUnity meals — go to https://cookunity.com/graham50 and use my code GRAHAM50 at checkout to try them out for yourself! Thanks to CookUnity for sponsoring this video! Let's talk about tenants falling behind on their rent and what this means for the housing market - Add me on Instagram: GPStephan
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TENANTS ARE FALLING BEHIND ON RENT
On the surface, this looks like an early warning sign: tenants worry about losing their homes, landlords worry about making mortgage payments, and investors worry about what this means for housing prices and the broader market.
LATE PAYMENTS ARE COMMON
Even in strong markets, it’s normal for 12–20% of tenants not to pay rent in full by the due date. A bounced payment, a paycheck delay, or a partial upfront payment can all mean “rent wasn’t paid on time,” even if the tenant catches up within days. By the end of the month, over 90% of tenants eventually pay in full.
PARTIAL PAYMENTS CHANGE THE NUMBERS
The reporting method counts only “paid in full, on time” rent as successful. That excludes partial payments or situations where tenants split rent across multiple paychecks. This inflates the appearance of missed rent, even though many renters are still able to cover the full amount by month’s end.
MOM AND POP LANDLORDS ARE HIT HARDEST
Independent landlords who own fewer than 10 units have the lowest on-time payment collection. They’re often more flexible with tenants, less strict on credit checks, and more willing to accept late or partial rent. This skews the numbers.
STATE-BY-STATE DIFFERENCES MATTER
Payment reliability isn’t the same everywhere. States like California have higher on-time rates, while places like Georgia show more late payments. Local economies, job markets, and rental regulations all play a role in whether tenants are able to keep up.
LATE FEES DON’T TELL THE WHOLE STORY
Regulators found that while fewer renters incurred late fees by late 2024, the ones who did often owed far more in back rent. This means the renters who struggle are in deeper financial trouble than the averages suggest.
THE DATA HAS LIMITATIONS
The chart many people are sharing excludes tenants more than 60 days behind, ignores very low-rent or very high-rent properties, and smooths the numbers into a 3-month average. That means severe distress could be hidden, while short-term volatility is averaged out.
WHY RENTERS ARE STRUGGLING MORE IN 2025
Higher housing costs, rising debt, and stagnant disposable income all make it harder for renters to stay current. Nearly half of all renters are now cost-burdened, spending more than a third of their income on housing. At the same time, auto loan delinquencies are climbing, credit scores are dropping, and everyday expenses like groceries are consuming larger portions of each paycheck.
WHAT THIS MEANS FOR LANDLORDS
Evictions are expensive and time-consuming. In most cases, working with tenants to find solutions is far better than pursuing legal action. Many tenants are honest people simply facing temporary hardships, and a flexible approach can prevent bigger issues down the road.
WHAT THIS MEANS FOR TENANTS
Landlords—especially smaller ones—still have their own bills to pay, from property taxes to insurance to repairs. If you’re unable to pay rent, communication is key. Being upfront about your situation is almost always better than ignoring the issue and hoping it resolves itself.
THE BIG PICTURE
Yes, late rental payments have increased since 2021, but the jump is only a few percentage points above historical averages. In 2019, before the pandemic, about 10% of tenants were already paying late. Today’s numbers aren’t great, but they aren’t catastrophic either. What we’re seeing is more likely the natural result of higher costs, more debt, and fewer financial cushions—not the collapse of the housing market.
MY THOUGHTS
This trend is worth watching, but not worth panicking over. A slight increase in late rent payments doesn’t mean the system is collapsing. It does, however, highlight the financial strain facing renters and the importance of context when interpreting housing data.
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