More Homeowners Are Renting Out Their Homes Instead of Selling Them

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WSJ Your Money Briefing 8 min 3 speakers 2 chapters transcribed 2 months ago
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ReliaQuest Advertiser 0:00
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J.R. Whalen 0:30
Here's your Money Briefing for Tuesday, September 20th. I'm J.R. Whalen for The Wall Street Journal. More prospective homebuyers are choosing to wait out rising prices and climbing mortgage rates, and that means some homeowners who are ready to move to a new house are stuck. Without the proceeds from a sale of their current home, they may miss an opportunity to buy a new place to live. But many are moving anyway, and then renting out their old home to generate cash.
Will Parker 0:58
There's a good chance that the rent you're going to command is higher than your mortgage payment. So not only are you getting your old mortgage taken care of, you may be even profiting on top of that.
J.R. Whalen 1:08
Will Parker covers the housing market for The Wall Street Journal. Coming up, we'll talk with him about the risks that homeowners face when they get into the landlord business and what the trend means for renters. That's after the break.
ReliaQuest Advertiser 1:19
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Why are more homeowners choosing to rent out their homes instead of selling?

ReliaQuest Advertiser 1:46
That's R-E-L-I-A-Q-U-E-S-T.com.
J.R. Whalen 1:56
Rising mortgage rates have tilted the balance of power in the current housing market to buyers. That is, unless you've set your sights on buying a new home and are trying to sell your current one. Wall Street Journal housing reporter Will Parker joins us to discuss how many homeowners are turning to renting out their old home to free up cash to move to a new place. Will, thank you very much for being here.
Will Parker 2:15
Thanks for having me.
J.R. Whalen 2:16
So, Will, over the past year, it seems that selling your home was as easy as getting a hold of a real estate agent or just putting the for sale sign up on the front lawn. What's brought the option of renting out your old home into the picture?
Will Parker 2:28
Yeah, what's happened is that there are fewer sellers than there were last year. There's a few reasons for that. Mortgage interest rates are a lot higher. That makes buying any house more expensive. And, you know, home prices have risen a lot and are still very high. So potential buyers aren't getting a lot of relief there either. So what's happening is home sellers are, you know, seeing what the market is for people who would buy their house, not getting a lot back from that, not getting people who want to pay what they want to sell for, and thinking, you know, we could probably make this work. going ahead and moving to the new home, holding onto the old one and renting it out because, you know, rents are really high.
Will Parker 3:07
You can command a lot for a house. And so it's become a stronger option for certainly some would-be home sellers, especially in places like California and Texas, where you've had a lot of buyers drop out of the market And there are so many more people who are there and interested in renting a house. And in fact, what we see is that, you know, at the same time, we know that that home sellers are more interested in renting out their homes. You know, we see some stats showing that people are delisting. Right. So we see the homes coming off the market at a rate that is much higher than it was last year. And, you know, some some portion of those people are likely renting out their houses instead.

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