When homes fail to sell and the owners decide to rent, it can impact the local rent supply and lower rental prices due to the increased inventory of rentals available.
Redfin economist Chen Zhao said in a recent Yahoo interview that housing gridlock—driven by high rates and locked-in homeowners—is forcing would-be sellers to rent out properties instead, creating a surge in sellers becoming landlords. “Those homes are adding supply to the rental market,” she said.
New supply from accidental landlords is cooling rent growth
So, this new supply is coming in to the rental market where there may already be new apartment construction that is also adding new rentals. This explains why rents are stabilizing in some areas and even declining.
When homes fail to sell and become rentals that increases rental inventory especially in single-family homes. More supply leads to less upward pressure on rents in some markets leading to flat or slightly declining rents.
This is happening especially in markets in Florida and Texas, including Houston, Austin, San Antonio, Dallas and Tampa and Orlando / Jacksonville.
In the West, Portland, Denver and Phoenix have large numbers of accidental landlords and a rising rental supply.
How Portland fits in the rent softening
For example, Portland’s rent declines are being driven by a surge in supply—from both new construction and homeowners turning unsold properties into rentals—pushing vacancy above 7% and giving renters the upper hand. Portland isn’t just “flattening”—it’s been in a multi-year rent correction.
So, in Portland there is new multifamily construction, accidental landlords adding to single-family rental inventory along with a softening local economy. This has led Portland landlords to provide more concessions (free rent, discounts), longer lease-up times and rent negotiations becoming common.
Zhao leads the economics team at Redfin, where she produces research on the housing market for public and internal audiences. Previously, she was an executive director leading housing finance and financial markets research at the JPMorgan Chase Institute.
