{"id":187876,"date":"2026-05-13T11:30:17","date_gmt":"2026-05-13T17:30:17","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=187876"},"modified":"2026-05-13T11:58:20","modified_gmt":"2026-05-13T17:58:20","slug":"35-percent-of-homeowners-wont-sell-at-any-price-and-thats-creating-a-gold-mine-for-small-landlords","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/35-percent-of-homeowners-wont-sell-at-any-price-and-thats-creating-a-gold-mine-for-small-landlords","title":{"rendered":"35% of Homeowners Won\u2019t Sell at Any Price\u2014And That\u2019s Creating a Gold Mine for Small Landlords"},"content":{"rendered":"

Millions of homeowners are clinging to their pandemic-era mortgage rates like castaways clutching driftwood. That stubbornness is resetting the rulebook for investors.<\/span><\/p>\n

A new survey of 1,000 mortgage holders by<\/span> Best Interest Financial and Clever Real Estate<\/span><\/a> found that 35% of homeowners with a mortgage rate under 6% would not give it up for any reason whatsoever. Among those with rates under 3%, the figure jumped to 52%.<\/span><\/p>\n

Nearly half\u201447%\u2014of those surveyed said that they <\/span>simply<\/span> couldn\u2019t afford a mortgage at today\u2019s rates if they had to start over.<\/span> The result is a housing market that, according to<\/span> Fortune<\/span><\/a><\/em>, has been frozen for three years.<\/span><\/p>\n

The Lock-In Effect Is Not Going Anywhere\u2014Here\u2019s What That Means<\/span><\/h2>\n

Since 2022, annual home sales have dropped to their lowest level\u2014approximately 4.1 million\u2014since the mid-90s, when the U.S. population was 22% smaller, according to the <\/span>Wall Street Journal<\/span><\/a><\/em>.<\/span><\/p>\n

There is a desperate need for more housing. However, according to data from Intercontinental Exchange cited by the<\/span> Journal<\/span><\/a><\/em>, 54% of primary homeowners are sitting on rates of 4% or lower\u2014and, as the Best Interest Financial and Clever Real Estate survey discovered, many of them do not intend to sell.<\/span><\/p>\n

For landlords currently sitting on rentals, here\u2019s what that means: Every family priced out of buying is another family looking for a quality rental.<\/span><\/p>\n

The Trump administration put the housing shortage at 10 million units, while<\/span> Realtor.com<\/span><\/a> and<\/span> Zillow<\/span><\/a> had it at half that amount last year.\u00a0<\/span><\/p>\n

It’s all about supply and demand. Demand far outweighs supply, which means landlords are sitting on one of this economy\u2019s most prized assets: housing.<\/span><\/p>\n

Affordability Continues to Keep Buyers Away<\/span><\/h2>\n

Said Dr. Jessica Lautz, NAR deputy chief economist, <\/span>in a Realtor.com press release<\/span><\/a>:\u00a0<\/span><\/p>\n

\u201cFor many younger households, affordability challenges and limited inventory are still making homeownership difficult to achieve. Older millennial buyers are now entering middle age, and with that comes a shift. <\/span>This cohort is now the highest-earning generation of homebuyers, <\/span>buys<\/span> the largest homes<\/span>, <\/span>and <\/span>is<\/span> most likely to have children living with them.<\/span> Those traits were once more commonly associated with Gen X buyers, who are now increasingly looking toward empty-nesting and retirement.\u201d<\/span><\/em><\/p>\n

However, further complicating the housing supply chain is that baby boomers, those aged 61-79, are transacting most of the real estate\u2014accounting for 42% of buyers and 55% of sellers\u2014leveraging their considerable home <\/span>equity<\/span><\/a> to do deals, leaving younger buyers locked out.<\/span><\/p>\n

Added Lautz:\u00a0<\/span><\/p>\n

\u201cBaby boomers are at a point in life when they have the flexibility to move, often with housing equity to help purchase their next home. <\/span>In earlier years, baby boomers\u2014like millennials today\u2014may have moved <\/span>because of<\/span> a job change or <\/span>the need for<\/span> a larger home.<\/span> Today, many baby boomers are embracing choice and moving to be closer to friends and family, to downsize, or to retire and enjoy a work-free lifestyle.\u201d<\/span><\/em><\/p>\n

Mortgage Interest Rates Are Keeping the Market Frozen<\/span><\/h2>\n

With interest rates still in the low-6% range with no end in sight, it seems likely prospective buyers will remain renting for a while yet.<\/span><\/p>\n

“We forecast that mortgage rates will range between 6% and 6.5% this year, and our latest weekly data show it’s trending towards the upper end of that range,\u201d Mike Fratantoni, chief economist for the Mortgage Bankers Association, told<\/span> Bankrate.com<\/span><\/a> in March.<\/span><\/p>\n

While the Bankrate article alluded to a gradual crumbling of 3% interest rates as some owners were forced to sell due to growing families or job relocation requirements, it also quoted a report from insurance company<\/span> First American<\/span><\/a> that tied moving to a geographic location. Those in pricier states, such as California, were less likely to give up their low interest rates than those in less expensive locations.<\/span><\/p>\n

The Rental Market Fundamentals Are Holding Strong<\/span><\/h2>\n

You\u2019ve probably heard mixed reviews about the current rental market.<\/span> ApartmentList.com<\/span><\/a>‘s April 2026 report shows that rents are up month over month but down 1.7% year over year. <\/span>This<\/span> is due in part to the sharp increase in rents after the pandemic, economic complications, affordability issues, and the war with Iran.<\/span><\/p>\n

However, it\u2019s probably a temporary situation, given the overwhelming lack of housing, which is likely pushing rents up, as it has in the past few months.<\/span><\/p>\n

The most recent<\/span> BiggerPockets Pulse survey<\/span><\/a> showed a slight downturn in optimism among landlords, as evidenced by slight rental decreases over the past year. However, <\/span>long-term<\/span>, with low inventory, high rates, and high prices, holding rental property remains almost inflation-proof because people will always need a place to live.<\/span><\/p>\n

\u201cReal estate is in a recovery mode,” Henry Chin, global head of research for commercial brokerage CBRE, told<\/span> US News & World Report<\/span><\/a><\/em>, but adds that the focus has shifted from price appreciation to steady income. “Investors should look at cyclical and structural points of view to pick the right assets and locations.\u201d<\/span><\/p>\n

Regarding the economic uncertainty posed by the Iran war, Chin said, \u201cDeveloped countries are front and center of investors’ minds as occupier demand continues to recover,\u201d adding that the \u201cU.S. is more resilient than Europe,\u201d which is more dependent on overseas oil than the U.S.<\/span><\/p>\n

Other experts interviewed in the same article concurred. \u201cInterest rates are just one piece of the puzzle, not the defining factor,” says Edward F. Pierzak, senior vice president of research at Nareit (the National Association of Real Estate Investment Trusts). “What matters most is the broader economic backdrop.\u201d\u00a0<\/span><\/p>\n

The sentiment <\/span>was echoed<\/span> by Roland Chow, financial planner and portfolio manager at Optura Advisors in Burlingame, California, who said, \u201cInvestors should think of real estate as a <\/span>diversifier to the portfolio<\/span><\/a> and, in the current higher-interest rate environment, as an income source and inflation hedge.\u201d<\/span><\/p>\n

Final Thoughts<\/span><\/h2>\n

With a <\/span>continual<\/span> housing bottleneck and homeowners reluctant to <\/span>part with<\/span> low rates, now is a great time to buy if you can.<\/span> However, it\u2019s not a case of <\/span>blindly<\/span> throwing a dart at a map of the country and picking a spot.<\/span><\/p>\n

The U.S. housing market is not monolithic. While there are always fluctuating cities, by far the best places to invest today are generally in the<\/span> Midwest and Sunbelt<\/span><\/a>, according to a recent Zillow analysis\u2014with a smattering in the Northeast\u2014assuming you want to keep away from pricier metros such as San Jose, San Francisco, and the New York tristate area.<\/span><\/p>\n

In the current economic climate, lower price points are a key driver. \u201cA huge component of buyer friendliness is affordability,\u201d Kara Ng, a senior economist at Zillow, told CNBC. \u201d[The Midwest] was affordable before the pandemic, and it is affordable after the pandemic.\u201d<\/span><\/p>\n

Did you know that a BiggerPockets Pro membership comes with over $5,000 in potential annual savings through Pro Perks, including discounts on property management, banking, renovation supplies, and investor loans and insurance.\u00a0<\/span>Become a Pro today!<\/span><\/a><\/em><\/p>\n

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