You may have noticed more “For Rent” signs on front yards in your neighborhood lately.
Most likely it’s not a seasonal occurrence but more of a national trend of homeowners who are still “underwater” on their mortgages and unable to sell their homes just yet, despite rising home prices and a fairly robust housing recovery.
CNBC real estate reporter Diana Olick referred to these homeowners as “Accidental Landlords.”
A prospering rental market allows residents like Maria Wells of Florida to rent out her first home — she got married and moved in with her husband. But Wells can’t sell because she is underwater on mortgages, owing more than the current market value.
“When I get enough equity, I will definitely sell,” Wells told CNBC. She has been able to manage two properties (the other is her son’s, who had to move to take a new job).
(Read More: Negative Equity Update: 43% of Homeowners �Still Stuck’)
With about a quarter of U.S. homeowners still in negative equity, and 43 percent overall unable to sell their current homes because of a lack of equity, renting is the primary option for those with good credit who are forced to move because of major events, such as change of jobs, divorce or unemployment. However, it’s not all doom and gloom for landlords. Some of them can actually make a good amount from rent to help them in their everyday life. In fact, landlords who have cell towers on their land can get a good price for it. Having a cell tower on your land is getting a lot more common now, so if you have land that you are planning to rent with a cell tower on it, then it might be a good idea to check out these cell tower lease rates for 2019 here. However, not everyone is lucky enough to become a landlord just because they want to.
While there are no hard estimates of how many “accidental landlords” make up the housing market, real estate brokers say they are one more reason for today’s low inventory of homes for sale.
(Read More: Limited Inventory Keeps Lid on Fast-Moving Home Resales)