As bargaining power in the U.S. housing market continues to shift toward buyers, a growing portion of homeowners are choosing a new strategy for their unsold properties: converting them into rentals.
According to a report released Wednesday by Zillow, 2.3% of homes listed for rent nationwide were previously listed for sale. This marks the second-highest level of “accidental landlords” recorded in the nearly six years that Zillow has tracked this metric, according to the real estate platform’s data.
The current figures approach the all-time high of 2.4% recorded by Zillow in November 2022. However, the underlying economic drivers between the two periods are fundamentally different.
Zillow researchers note that the 2022 spike was a “shock-driven” phenomenon. During that year, mortgage rates abruptly skyrocketed from 3.11% to 7.08% by late October, halving buyer purchasing power and leaving sellers scrambling to adjust to a rapidly changing landscape.
In contrast, the real estate giant characterizes the current increase of accidental landlords as “choice-driven.” Despite home values remaining relatively flat nationwide over the past year, sellers are rarely in a position where they are forced to liquidate distressed properties.
Many current homeowners secured or refinanced their mortgages when rates were at or below 3%, according to the report. Because these owners have relatively inexpensive monthly mortgage payments, renting out the property at a rate high enough to cover their carrying costs is a financially viable alternative to slashing their asking price in a slower sales environment.
Geographically, this trend is highly concentrated in markets that lean heavily in favor of buyers, where listings generally take longer to sell and price cuts are more frequent. Denver currently leads the nation with the highest share of accidental landlords, with 4.9% of its rental stock made up of previously for-sale homes, according to Zillow.
The Sun Belt is also seeing a massive influx of these properties based on Zillow’s data. Of the top 10 metropolitan areas with the highest share of accidental landlords, seven are located in Texas or Florida, states that have recently seen a slowdown in migration. This includes major markets such as Houston (4.2%), Austin (4.1%), San Antonio (3.9%), Tampa (3.7%) and Miami (3.5%).
Conversely, the lowest share of for-sale homes converting to rentals can be found in the nation’s most competitive housing markets. Zillow notes that metros like Providence, R.I. (0.6%), Boston (0.6%) and New York City (0.7%) have the lowest rates of accidental landlords. Notably, eight of the bottom 10 metros for this metric are also featured on Zillow’s list of the hottest housing markets for 2026.
