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The Corporate Buy-Up of Homeownership: Are Financial Titans Buying Up All the Homes?

If you’re considering purchasing a home, you might be keeping an eye on the latest real estate news to stay informed about factors that could influence your decision. You’ve likely heard about investors and their impact on the housing market, leading you to ask questions like:

  • How many properties do investors own?
  • Are large institutional investors, such as Wall Street firms, buying so many properties that it’s difficult for the average person to find a home?

To address these queries, let’s delve into the data to understand the real situation. Firstly, let’s determine the number of single-family homes (SFHs) and the percentage of these that are rentals owned by investors. According to SFR Investor, there are 82 million SFHs in the country. But how many of these are rentals?

A recent post reveals that 68 million (82.93%) of these homes are owner-occupied, meaning the owner resides in the property. Subtracting this figure from the total number of SFHs (82 million) leaves approximately 14 million homes that are single-family rentals (SFRs).

Do institutional investors own all of these remaining 14 million homes? Far from it. Let’s break it down further. There are four types of investors:

  • The small-scale investor who owns between 1-9 SFRs
  • The regional investor who owns between 10-99 SFRs
  • The smaller national investor who owns between 100-999 SFRs
  • The institutional investor who owns over 1,000 SFRs

These categories demonstrate that not all investors are large institutional entities. To illustrate this point, here are the percentages of rental homes owned by each type of investor. Contrary to what news and social media might suggest, the chart shows that the majority of rental homes are not owned by large institutional investors. Instead, most are owned by small-scale investors, like your friends and neighbors.

The reality is that many people, just like you, believe in homeownership and see buying a home (or a second home) as an investment. They may have seen an opportunity to buy a second home in recent years to use as a rental and generate extra income. Or perhaps they chose to keep their first home when they moved to a new one.

So, don’t be misled by everything you read or hear about institutional investors. They are not buying all the homes and making it impossible for the average person to buy. The data shows that institutional investors actually make up the smallest portion of the market.

The Bottom Line

While institutional investors do play a role in the single-family rental market, they are not buying all the available homes. If you have further questions about the housing market, reach out to a reliable local expert who can provide the context you need.

What To Do

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