Are big investors buying all the houses today?
If you are looking for a home to buy, this may be of interest to you. Maybe you’ve read about it or seen a post on social media about how all the investors buying homes are making it difficult for the average buyer to find what they’re looking for. But spoiler alert: there’s a lot of misinformation here. To be clear, here’s my analysis of what’s going on. Much of the activism of big investors is actually in the rearview mirror.
The Wall Street Journal (WSJ) explains:
“Investors of all sizes spent billions of dollars buying homes during the pandemic. At the 2022 peak, they bought more than one in every four single-family homes sold, though more recently their activity has slowed as interest rates rose and supply became tighter.”
The key is that the investor’s activity was significantly delayed and even reached the height of investors’ shopping, not simple, simple and daily buyers. Most investors who have purchased in recent years are not big investors. Most of it was a small mother and pop investor, just like your neighbor, some of them, probably the most important houses and rest houses.
However, as it is often discussed on social networks, we will focus on concentric and investment companies. Mega investors are those who own 1,000 properties. You may be surprised to see that, according to the Wall Street Journal, they don’t buy all that many homes (see graph below):
This graph tells us two things. First, institutional investors have never bought affordable housing in large quantities. At their peak in 2022, they bought about 2% of available single-family homes. Second, this percentage has also decreased in recent years (so low that it is rounded to 0%). To understand why rates are falling, private lender RCN Capital asked investors about the challenges they face. RCN Capital CEO Jeffrey Tesch said:
“Investors are already facing many challenges in today’s housing market – rising prices, limited inventory, and higher financing costs.”
These challenges are important to understand because they show that big, big investors are not taking control of the real estate market.
So don’t believe everything you hear. They confiscate all the houses and do not allow ordinary people to buy them.
