A new report comes from Government Accountability Office The U.S. Government Accountability Office (GAO) concluded that while institutional investors may have contributed to the rise in home prices since 2009, their actual impact on homeownership opportunities is harder to assess.
Large institutional investors typically emerged in the wake of the spate of defaults and foreclosures triggered by the 2007-08 financial crisis, and began putting stock on the market in 2007-09. investors, such as formerBlackstone Group company invitation home“bulk buying” foreclosed homes that many people convert into rentals, giving them a clear advantage over small investors.
“With mortgage lenders generally lending less, institutional investors have a financing advantage over smaller investors with the help of access to capital through various channels,” the findings said. “In addition, technological advancements have made it easier for companies to Acquire and manage a large number of single-family homes.”
While initially relying on large purchases, institutional investors eventually shifted more toward smaller purchases, merging with smaller investors or investing in the construction of single-family homes that were eventually rented out.
“Studies reviewed by GAO found that no investors owned 1,000 or more single-family rental homes as of the end of 2011,” the results read. “However, by 2015, institutional investors collectively owned an estimated 170,000-300,000 homes. As of 2022 In June 2019, institutional investors of varying sizes captured a significant portion of the single-family rental market in many cities, particularly in the Sun Belt states.
However, the full impact of these holdings on home-buying opportunities is difficult to determine, and the report does not draw conclusions about what impact these investors may or may not have on today’s home-buying market.
Information from which such conclusions could be drawn “is unclear, as data are limited and there is no consistent definition of institutional investors,” the report said.
In a recent episode of HousingWire Daily, HousingWire Principal Analyst Logan Mohtashami examined the comments of a politician who accused institutional investors of buying large amounts of inventory.
“They don’t have that kind of capital,” he added. Blackstone Group Today, the company owns about 0.05% of the single-family homes in the United States.
A recent analysis by Resi Club using Parcl Labs data found that among the 100 largest metro housing markets, Oxnard, Calif., San Francisco, Calif., San Jose, Calif., San Diego, Calif., and Honolulu, Hawaii have the highest proportions of investors. Home ownership rates are approximately 20%. The vast majority of these investors are small investors, owning less than 10 houses in total. Institutional investors (1,000 or more single-family homes) own only about 1% of the total U.S. housing stock, according to Parcl Labs.
