00:00 Speaker A
Accidental landlord. So these are people who couldn’t sell and they’re now renting. and that’s interesting. Walk me through that and then how how big a factor is that in terms of supply Chen?
00:13 Chen
So, you know, what we see in the housing market right now is a situation where buyers and sellers are really not on the same page a lot of the times. So, sellers have gotten used to very fast price increases. They remember that their neighbor, you know, sold their house for um, you know, a lot of money and maybe there was a bidding war and now when they’re listing it, they’re not liking the prices that they’re seeing and the offers that they’re receiving from potential buyers. So what we see as a result of that is that there’s a record number of delistings that are happening. And so, um when these homes get delisted, you know, some folks will stay in their home, but other folks because, you know, they need to move to a different neighborhood or whatever reason, they actually need to rent out their home. So they never intended to become a landlord, but now they sort of have to be. Um so we do think this is happening at an increased rate right now. Is it, you know, going to completely change the rental market? Probably not. Um maybe outside of a few places, but it is something that we’re seeing more and more of.
01:21 Speaker A
So bottom line, Chen for viewers are watching right now. I mean given that mortgage rates, you know, they’re still relatively kind of elevated here. Is renting the smarter financial move, Chen? I’m just curious how you think through that question as an economist.
01:43 Chen
It’s a really complicated question. So I think, you know, some people will say you can just look at, well, you know, your monthly rent versus, you know, your monthly mortgage payment and compare the two and it seems like renting is a better deal than buying. But it’s really not that simple, right? Because we know that buying means you’re building equity. Um for a lot of families, this is how people build wealth for their families and it’s how people prefer to invest. Um, you know, the US tax code really heavily favors um home ownership for example. It’s also the case that it’s not just about dollars and cents. For a lot of people, they want to live in a particular neighborhood. and in that neighborhood you cannot rent. You can only buy a house. So there’s a lot of factors that go into this decision that’s not just about comparing, well, what is my monthly rent versus what is the monthly mortgage payment?