A rising share of homeowners are turning unsold properties into rentals, creating a growing pool of accidental landlords, according to a new Zillow analysis. Nationwide, 2.3% of homes listed for rent were previously listed for sale, the highest mark in nearly six years of the home market place's tracking. The only higher nationwide share occurred in November 2022, when mortgage rates more than doubled and sellers faced a sudden drop in buyer demand.
Unlike 2022, today's trend is choice-driven rather than shock-driven, Zillow said.
Homeowners are generally not forced to sell at a loss. Despite flat home values nationwide over the past year and declines in roughly half of the 50 largest metros, sellers who bought or refinanced at historically low rates can still cover mortgage payments through rentals. Renting allows them to buy time and avoid deep price cuts while maintaining control over their investment.
Certain metros show particularly high shares of accidental landlords, reflecting buyer-friendly conditions and slower home sales. Leading the trend are Denver (4.9%), Houston (4.2%), Austin (4.1%), San Antonio (3.9%), Portland (3.7%), Tampa (3.7%), Miami (3.5%), Dallas (3.4%), Jacksonville (3.3%) and Nashville (3.2%). Conversely, cities with the lowest share, including Providence, Boston, New York, Hartford, Buffalo, Milwaukee, Chicago, Philadelphia, Cleveland and Richmond, are among the hottest housing markets, where competition drives faster sales and fewer would-be landlords.
Detached single-family homes are the most common accidental-landlord properties, accounting for 3.4% of rentals, compared with 2.2% for townhomes and 1.1% for condos. Condos have seen the sharpest rise relative to the previous five-year average, reflecting shifts in urban demand and pandemic-era preferences.
For the broader market, accidental landlords expand rental inventory, particularly for single-family homes, providing more options for renters. However, these homeowners may be navigating property management, local regulations and tenant relations for the first time. Buyers may face a floor on negotiations, as some sellers choose to rent rather than accept discounted offers, while homeowners benefit from maintaining control of their investment, the report said.
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