Accidental landlords — an unwelcome consequence of the housing market shock
During the bubble years of the mid-2000s, Americans were encouraged, often inappropriately, to become homeowners. As prices spiraled unsustainably higher, buyers — and lenders — stretched even more to reach that goal.
Then it all came crashing down.
Prices dropped about 40% nationwide, lenders stopped lending and mortgage companies stopped answering the phone when distressed homeowners called. In the deep recession that followed the market shock, millions of jobs and trillions of dollars of housing wealth disappeared. America, the land of opportunity and mobility, was suddenly stagnant and uncooperative.
In the midst of it all, many Americans made decisions and accommodations that they might never have considered otherwise. One small representation of that is what you might call the rise of the “accidental landlord.”
For some that meant a mortgage from the market’s peak became unaffordable. For others, it has meant being stuck on the property ladder, unable to climb. It’s not clear if this financial crisis left more people in the position of owning a home and needing to unexpectedly rent it out than in past periods, but there are good reasons to think that the lack of dynamism in the economy, now a decade past the 2007-2009 crisis, has left a mark.
MarketWatch collected the personal narratives of four such accidental landlords, all of them millennials or on the cusp of that age group. It’s a demographic often said to be allergic to ownership. In fact, our subjects believed in the so-called American Dream of homeownership, and then had to make painful decisions about how to navigate a system that had turned nightmarish.