27% of homes sold, not 27% of US homes. The title is completely misleading.
Not a shocker, given high interest rates usually drive down prices, and investors are not getting mortgages. Great investment to keep value, not so much for growth.
Feels like non news. Or at least, a continuation of existing trends.
We don't build enough housing, so housing becomes a good investment, eventually pricing out everyone except existing investors or people with large assets. We' structured the system so that once you're in you're IN. Leverage, 30yr mortgages, tax deductions all continue to subsidize existing homeowners at the expense of everyone else (who are technically a minority).
If this continues, expect to see more and more radical policy proposals by young people.
It's only a 5-year high. Do they not have data before 2020? I need data over a much longer timeframe than 5 years to determine how interesting the 27% number is.
> ... investor-owned homes account for roughly 20% of the nation's 86 million single-family homes, the firm said.
> Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% of all investor-owned residential properties, while those with between 6 and 10 properties account for another 5%.
> Institutional investors that own 1,000 or more homes account for only about 2.2% of all investor-owned homes, the firm said.
> ...
> Out of a group of eight of the biggest companies that own and lease single-family houses, including Invitation Homes and American Homes 4 Rent, six sold more homes in the second quarter than they bought ...
SO - how many of those mom-and-pop investors are mostly buying homes as investments? Vs. how many are building a well-to-do lifestyle, with a "cabin on the lake up north", and "winter condo in Florida"? (Or buying homes for their less-well-to-do children, maybe with some inheritance tax dodges baked in?)
EDIT: The issue with "investor" is here:
> Nearly 27% of all homes sold in the first three months of the year were bought by investors -- the highest share in at least five years, according to a report by real estate data provider BatchData.
How much does BatchData actually know about the finances and lifestyles of the "mom-and-pop" buyers which it has labeled as "investors"? (Vs. "developers", or "fixer-uppers", or multi-home lifestylers, vs. ...)
If investors are buying homes to rent them out, then is this really a bad thing?
I know a lot of people who have struggled to find homes to rent when they need to move to a new city with a family for a shorter-term job like a year or two. All the homes available are for sale, none are to rent.
If it's to rent, it's not taking any living space off the market.
And with elevated mortgage rates, it could be smart for people to rent now rather than buy, waiting to buy until interest rates come down.
Don't more than 27% of Americans rent rather than own the housing they live in? It appears 36% rent. Doesn't this mean that the share of owner-occupied housing is going down, not up as the headline implies and readers are assuming?
I hate to pass judgement on the individuals who work in industries. We have families and retirements to secure.
But to me, this kind of corporate, large scale buy-out of residential property is immoral and dangerous to our society.
They tell themselves they're increasing liquidity in the market or that they're helping people who can't afford to buy, have a place to rent.
It's just excuses for taking advantage of a situation, and I wish what your friend did was against the law (or else regulated into oblivion) so regular people could afford a home in cities.
What percentage of people live in a rental? All rentals were at some point bought by investors. Unless they’re a much smaller volume of total sales (held longer?) then it seems ok even though the number sounds alarming
Both investors buying up homes and i-got-mine retirees can be part of the problem. They aren't mutually exclusive. One puts pressure on existing stock and the other ensures there's no new stock.
> Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% of all investor-owned residential properties
In my social circle, if you are going to buy a new house, you are doing everything you can to keep your current house while purchasing the second. It is the clearest path to retirement from traditional 40hr/week employment for the people around me.
> Institutional investors that own 1,000 or more homes account for only about 2.2% of all investor-owned homes, the firm said.
Talking about these two cohorts in the same article may be problematic as they such vastly different motives, operating procedures, and (please don't light me on fire) different regulations needed.
Someone should do a startup that focuses on designing a sort of RV that can be mass produced, for millenials, genZ, and so on. Maybe they could be modular, link them up for communal living, that sort of thing.
Climate change isn’t going to be stopped. Don’t get tied to some dirt that’ll be inhospitable before too long. And houses are generally full of obsolete crap anyway, like bad electric wiring, rooms without ethernet, and big empty rooms that need to be inefficiently climate controlled.
Tech folks should really lead the way on this. If you are remote and have a high wage, why don’t you live in some futuristic RV off in some idyllic countryside?
It's not even a long article, but why are so many of the comments ignoring the end of it? "Indications are that institutional investors are scaling back home sales." from the article would seem to contradict a large number of the comments.
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"Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% of all investor-owned residential properties, while those with between 6 and 10 properties account for another 5%.
Institutional investors that own 1,000 or more homes account for only about 2.2% of all investor-owned homes, the firm said.
And that number could get smaller, amid signs that large institutional investors are scaling back home purchases.
Out of a group of eight of the biggest companies that own and lease single-family houses, including Invitation Homes and American Homes 4 Rent, six sold more homes in the second quarter than they bought, according to data from Parcl Labs."
First off, this is only for homes sold in the first 3 months which based on the extremely limited data I've looked at[1] seems to meaningfully below the total number of homes sold. With that said, this is still way more than I expected, I probably would have guessed closer to 2.7% than 27%.
Edit: Oh nevermind, they included individuals owning 1-99 houses buying rental properties as investors making institutional investors more like 2.2% (of the 27%) much more in line with what I would have guessed.
34 comments
[ 3.3 ms ] story [ 57.3 ms ] threadNot a shocker, given high interest rates usually drive down prices, and investors are not getting mortgages. Great investment to keep value, not so much for growth.
We don't build enough housing, so housing becomes a good investment, eventually pricing out everyone except existing investors or people with large assets. We' structured the system so that once you're in you're IN. Leverage, 30yr mortgages, tax deductions all continue to subsidize existing homeowners at the expense of everyone else (who are technically a minority).
If this continues, expect to see more and more radical policy proposals by young people.
> Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% of all investor-owned residential properties, while those with between 6 and 10 properties account for another 5%.
> Institutional investors that own 1,000 or more homes account for only about 2.2% of all investor-owned homes, the firm said.
> ...
> Out of a group of eight of the biggest companies that own and lease single-family houses, including Invitation Homes and American Homes 4 Rent, six sold more homes in the second quarter than they bought ...
SO - how many of those mom-and-pop investors are mostly buying homes as investments? Vs. how many are building a well-to-do lifestyle, with a "cabin on the lake up north", and "winter condo in Florida"? (Or buying homes for their less-well-to-do children, maybe with some inheritance tax dodges baked in?)
EDIT: The issue with "investor" is here:
> Nearly 27% of all homes sold in the first three months of the year were bought by investors -- the highest share in at least five years, according to a report by real estate data provider BatchData.
How much does BatchData actually know about the finances and lifestyles of the "mom-and-pop" buyers which it has labeled as "investors"? (Vs. "developers", or "fixer-uppers", or multi-home lifestylers, vs. ...)
I don't think we can tell.
I know a lot of people who have struggled to find homes to rent when they need to move to a new city with a family for a shorter-term job like a year or two. All the homes available are for sale, none are to rent.
If it's to rent, it's not taking any living space off the market.
And with elevated mortgage rates, it could be smart for people to rent now rather than buy, waiting to buy until interest rates come down.
When houses become an investment, that's when you start screwing young people! And it stops being an asset if you just simply build more
His company goes into neighborhoods that are often struggling, buy houses for cash, gut them, then rent them.
They have a lot of buying leverage, because there's no mortgage to deal with. They just slap down the cash.
That's one way that higher interest rates cause problems. It's hard to compete with someone that can hand you a cashier's check for $500,000.
But to me, this kind of corporate, large scale buy-out of residential property is immoral and dangerous to our society.
They tell themselves they're increasing liquidity in the market or that they're helping people who can't afford to buy, have a place to rent.
It's just excuses for taking advantage of a situation, and I wish what your friend did was against the law (or else regulated into oblivion) so regular people could afford a home in cities.
https://bendyimby.com/2024/04/16/the-hearing-and-the-housing...
I wish everyone who cares about the cost of housing could go to a hearing like that. It's a huge eye opener.
Also, here's a good debunking of investors being some kind of root cause rather than a symptom of housing that is scarce: https://www.theatlantic.com/ideas/archive/2023/01/housing-cr...
> Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% of all investor-owned residential properties
In my social circle, if you are going to buy a new house, you are doing everything you can to keep your current house while purchasing the second. It is the clearest path to retirement from traditional 40hr/week employment for the people around me.
> Institutional investors that own 1,000 or more homes account for only about 2.2% of all investor-owned homes, the firm said.
Talking about these two cohorts in the same article may be problematic as they such vastly different motives, operating procedures, and (please don't light me on fire) different regulations needed.
Climate change isn’t going to be stopped. Don’t get tied to some dirt that’ll be inhospitable before too long. And houses are generally full of obsolete crap anyway, like bad electric wiring, rooms without ethernet, and big empty rooms that need to be inefficiently climate controlled.
Tech folks should really lead the way on this. If you are remote and have a high wage, why don’t you live in some futuristic RV off in some idyllic countryside?
--
"Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% of all investor-owned residential properties, while those with between 6 and 10 properties account for another 5%.
Institutional investors that own 1,000 or more homes account for only about 2.2% of all investor-owned homes, the firm said.
And that number could get smaller, amid signs that large institutional investors are scaling back home purchases.
Out of a group of eight of the biggest companies that own and lease single-family houses, including Invitation Homes and American Homes 4 Rent, six sold more homes in the second quarter than they bought, according to data from Parcl Labs."
Edit: Oh nevermind, they included individuals owning 1-99 houses buying rental properties as investors making institutional investors more like 2.2% (of the 27%) much more in line with what I would have guessed.
[1]https://www.census.gov/construction/nrs/pdf/newressales.pdf