More Homeowners Turn Into Unplanned Landlords As Sales Stagnate

Many owners who can’t sell at desired prices are choosing to rent out their homes, new market data shows.

A growing number of U.S. homeowners are converting properties they tried to sell into rental units after failing to attract buyers at the price they wanted, according to recent analyses from two major real estate research firms. One firm found that about 1 in 28 active listings this January had been taken off the market previously, the largest January share since 2016. A separate platform reported that roughly 1 in 45 rental listings in November had first appeared as homes for sale — a level not seen since 2022 — and that figure held steady into December.

Industry analysts and homeowners point to higher borrowing costs and softer buyer demand as the main drivers. Owners facing mortgage payments, property taxes and the surprise tab for repairs are often deciding to rent rather than cut their asking price. “We weren’t ready to eat the loss, so leasing the place made sense while we wait for conditions to improve,” said Amanda Lopez, who converted a suburban three-bedroom after an unsuccessful sale attempt last year. She said rental income roughly matches her monthly holding costs.

Housing experts warn that this trend is reshaping local rental inventories. “When sellers shift to renting, supply increases quickly because these units were already market-ready,” said Dr. Laura Kim, a housing economist at the Urban Policy Center. She added that in some metros the influx could ease rental growth, but inexperienced landlords may struggle with upkeep and tenant management, creating other strains on neighborhoods and courts.

The phenomenon is concentrated where listings have lingered longest. Houston led metros in December, with about 1 in 24 rentals having first been listed for sale, followed by cities such as Denver, Austin and Tampa. Meanwhile, some owners who pulled listings late last year are relisting now, betting on stronger spring demand, so the mix of sales, rentals and withdrawn listings could shift again in the months ahead.