Homeownership in the Shadows: Examining Wall Street's Impact on American Homes

If you’re thinking about buying a home, you may find yourself interested in the latest real estate headlines so you can have a pulse on all of the things that could impact your decision. If that’s the case, you’ve probably heard mention of investors, and wondered how they’re impacting the housing market right now. That could leave you asking yourself questions like:

  • How many homes do investors own?
  • Are institutional investors, like large Wall Street Firms, really buying up so many homes that the average person can’t find one?

To answer those questions, here’s the real story of what’s happening based on the data.  

Let’s start with establishing how many single-family homes (SFHs) there are and what portion of those are rentals owned by investors. According to SFR Investor, which studies the single-family rental market in the United States, there are eighty-two million single-family homes in this country. But how many of them are actually rentals?

According to data shared in a recent post, sixty-eight million (82.93%) of those homes are owner-occupied – meaning the person who owns the home lives in it. If you subtract that sixty-eight million from the total number of single-family homes (82 million), that leaves just about fourteen million homes left that are single-family rentals (SFRs).

Do institutional investors own all of those remaining fourteen million homes? Not even close. Let’s take it one step further. There are four categories of investors:

  • The mom & pop investor who owns between 1-9 SFRs
  • The regional investor who owns between 10-99 SFRs
  • Smaller national investor who owns between 100-999 SFRs
  • The institutional investor who owns over 1,000 SFRs

These categories show that not all investors are large institutional investors. To help convey that even more clearly, here are the percentages of rental homes owned by each type of investor (see chart below):

As you can see in the chart, despite what the news and social media would have you believe, the green shows the vast majority are not owned by large institutional investors. Instead, most are owned by small mom & pop investors, like your friends and neighbors.

What’s actually happening is, that there are people out there, just like you, who believe in homeownership, and they view buying a home (or a second home) as an investment. Maybe they saw an opportunity to buy a second home over the last few years to use it as a rental and generate additional income. Or maybe they just decided to keep their first house rather than sell it when they moved up.

So, don’t believe everything you read or hear about institutional investors. They aren’t buying up all the homes and making it impossible for the average person to buy. That’s just not what the numbers show. Institutional investors are actually the smallest piece of the pie chart.

Bottom Line

While it’s true that institutional investors are a player in the single-family rental marketplace, they’re not buying up all of the houses on the market. If you have other questions about things you’re hearing about the housing market, let’s connect so you have an expert to give you the context you need.

325 Properties
Page 1 of 28
Open 2/25
651 Resolute Ln Nokomis,  FL 34275
$539,000
Neighborhood: Calusa Park
3
Beds
2
Baths
1,806
Sq.Ft.
2016
Year Built
1
Day on Site
A4597586
MLS
$11,795,000
Neighborhood: Casey Key
5
Beds
6F11/2
Baths
6,596
Sq.Ft.
2008
Year Built
1
Day on Site
A4600753
MLS
Open 2/25
1106 Hoover St Nokomis,  FL 34275
$649,000
Neighborhood: Laurel Woodlands
3
Beds
2
Baths
1,991
Sq.Ft.
1987
Year Built
1
Day on Site
N6130575
MLS
Open 2/24
257 Calmar WAY Nokomis,  FL 34275
$527,000
Neighborhood: Toscana Isles Ph 4 Un1-2
2
Beds
2
Baths
1,832
Sq.Ft.
2020
Year Built
2
Days on Site
N6131300
MLS
Open 2/25
474 Bellini CIRCLE Nokomis,  FL 34275
$1,200,000
Neighborhood: Sorrento South
2
Beds
2
Baths
1,794
Sq.Ft.
1966
Year Built
2
Days on Site
N6131387
MLS
$169,900
Neighborhood: Kings Gate Sec I
1
Beds
2
Baths
778
Sq.Ft.
1989
Year Built
2
Days on Site
A4598558
MLS
$540,000
Neighborhood: Calusa Lakes
3
Beds
2
Baths
2,362
Sq.Ft.
1997
Year Built
2
Days on Site
N6131425
MLS
$427,900
Neighborhood: Sorrento Villas 6
3
Beds
2
Baths
1,850
Sq.Ft.
1992
Year Built
2
Days on Site
N6131418
MLS
Open 2/25
2123 Calusa Lakes Blvd Nokomis,  FL 34275
$1,495,000
Neighborhood: Calusa Lakes
4
Beds
4
Baths
4,255
Sq.Ft.
2000
Year Built
3
Days on Site
A4600209
MLS
$670,000
Neighborhood: Laurel Woodlands
3
Beds
2
Baths
1,844
Sq.Ft.
1987
Year Built
3
Days on Site
A4600415
MLS
$225,000
Neighborhood: Gulf Harbor Marina
33,300
Sq.Ft. Lot
3
Days on Site
D6135180
MLS
3
Beds
2F11/2
Baths
1,373
Sq.Ft.
2024
Year Built
3
Days on Site
A4600642
MLS

Post a Comment