New reports from Government Accountability Office The GAO concluded that while institutional investors may have contributed to rising home prices since 2009, their actual impact on homeownership opportunities is more difficult to assess.
Large institutional investors emerged after the defaults and foreclosures that followed the 2007-2008 financial crisis, pumping inventory into the market from 2007 to 2009.Blackstone Group company Invitational Housingthey are “bulk buying” foreclosed homes and converting many of them into rental properties, giving them a distinct advantage over smaller investors.
“At a time when mortgage lenders were generally reducing lending, institutional investors had a financing advantage over smaller investors due to their ability to raise capital from a variety of sources,” the study said. “Furthermore, technological advances have made it easier for companies to acquire and manage large portfolios of single-family homes.”
Institutional investors initially relied on large volume purchases but eventually shifted to smaller purchases, merging with smaller investors or investing in the construction of single-family homes that they would eventually rent out.
“GAO found that no investor surveyed owned more than 1,000 single-family rental homes as of the end of 2011,” the study found. “However, by 2015, institutional investors collectively owned an estimated 170,000 to 300,000 homes. As of June 2022, institutional investors of various sizes controlled a large portion of the single-family rental market in many cities, particularly in Sunbelt states.”
But it’s difficult to gauge the full impact of these holdings on homeownership opportunities, and the report doesn’t draw any conclusions about what impact these investors may or may not have had on today’s home-buying market.
The report noted that the basis for drawing such a conclusion was “unclear due to limited data and the lack of a consistent definition of institutional investors.”
In a recent episode of HousingWire Daily, HousingWire lead analyst Logan Mohtashami examined comments made by politicians who have accused institutional investors of hoarding large amounts of inventory.
“They don’t have that kind of capital,” he said. Blackstone Group Currently, they own about 0.05% of single-family homes in the United States.
A recent analysis by Resi Club found that: Parcle Lab Among the 100 largest metropolitan housing markets, Oxnard, CA; San Francisco, CA; San Jose, CA; San Diego, CA; and Honolulu, HI had the highest investor homeownership rates, all at around 20 percent, according to the data. Most of these investors are small investors, owning fewer than 10 homes. Institutional investors (those with more than 1,000 single-family homes) own only about 1 percent of the total U.S. housing stock, according to the data. Parcle Lab.