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Key Takeaways High mortgage rates and a cooler housing market are leaving more homeowners unable to sell at the price they want.
This dynamic prompts them to rent out properties instead of cutting prices.
A near-record share of rental listings now comes from homes that recently failed to sell, with about 2.2% of Zillow rentals comprised of these “accidental landlord” properties.
Americans who can’t get the price they want for their homes are increasingly turning into “accidental landlords,” renting out properties they had hoped to sell, according to a new report from The Wall Street Journal.
A Zillow analysis shows that accidental landlords comprise a near-record share of rental listings. Around 2.2% of rental listings on Zillow in November had first been listed for sale, the highest level since 2022, per the analysis. The rate of accidental landlords was about the same in December.
The rate was higher in markets where unsold listings are gathering dust. Zillow pointed out that Houston had the highest occurrence of accidental landlords in December, at 4.2%. Denver, Colorado; Austin, Texas; and Tampa, Florida followed suit.
More home sellers are becoming accidental landlords due to a mix of high mortgage rates and a cooler housing market, per the Journal. Many current owners locked in or refinanced at rates near 3%. With buyers gaining leverage and listings sitting longer, sellers face a choice: slash the price or convert the home into a rental.
Renting as a last resort
For many of these owners, the choice of landlording is a reluctant Plan B. For example, one South Carolina couple, Jim and Lindy Kennedy, told the Journal that they rented out their unsold home for six months and found it returned in terrible condition, especially the bathrooms.
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