Are Wall Street’s big investors really buying 44% of homes this year? The answer is no. It’s not even close to that.Housing inventory is near record lows, but major institutional investors are invitation housing or black rock There is no responsibility.
The 44% claim was announced in the headline of a Medium article last week and has since spread like wildfire across social media. Congress has also taken advantage of this trend, with Democratic lawmakers introducing bills that would limit or ban hedge funds from buying single-family homes.
In 2023, crazy housing myths spread (airbnb However, this may be the most ridiculous so far, as this claim is very easy to disprove. Let’s take a look at the data. Data tells us everything we need to know.
First graph below, provided by: freddie mac, which shows where large institutional buyers rank as a percentage of the market. As you can see, even together with iBuyers, they make up only a small portion of all American homebuyers. In fact, institutional homebuyers (those who purchased more than 100 homes in a 12-month period) did not even reach a market share of 2.5% at the peak level of this data line dating back to the beginning of this century. did.
As seen in the graph below, the overall market share of investors has increased since 2000 and is currently around 30%, but the majority are small retail investors.
The chart below from John Burns Real Estate is another great illustration of this point. It can be seen that the proportion of home purchases by large investors, that is, investors who own more than 1,000 properties, is very small. Again, the majority of home purchases for many years have been Tier 1 investors buying properties 1-9.
The widespread story that Wall Street bought 44% of single-family homes this year is laughable. More than 1,000 block buyers accounted for just 0.4% of the market share in the second quarter.
So, to make a long and complicated story very simple, there is no data to show that Wall Street has been the largest purchaser of American homes since 2000. If you want to blame someone else, you will. Millennials, the kids who eat avocado toast, started buying homes in 2013 and made up the largest share of homebuyers until mortgage rates rose in 2022. Since then, Gen X and baby boomers have once again come out on top. , by National Association of Realtors. In any case, it’s not Wall Street, but it’s not a sexy topic in the class struggle dialogue.
