When a homeowner sells the home they live in, their most common move is to use the proceeds to buy a replacement property, if they haven’t already done so. While it seems like homeowners would always remain homeowners, it does happen that people transition from homeownership to renting. But in most cases, the seller has decided to sell high and then rent for a short time while waiting for prices to bottom out. This is called timing the market.
This is not what’s happening now. Home prices and mortgage rates are both high, which is pricing homeowners out of their current home — and pricing 80% of them out of the market entirely. They aren’t waiting for a better time to buy; they’re simply no longer able to afford ownership. They become renters by necessity. Fortunately for people in such a predicament, it may not last too horribly long, though certainly longer than they would have wanted. It’s expected that prices will reach bottom around 2025.