Considering a home purchase? Staying updated with real estate headlines is likely on your radar, especially to grasp factors impacting your decision. Lately, talk of investors and their influence on the housing market may have caught your attention. This might prompt questions like:
- How many homes do investors possess?
- Are massive Wall Street firms snagging so many homes that regular folks can't find one?
Let's delve into the reality, backed by data, to address these queries.
First off, let's establish the count of single-family homes (SFHs) and the share owned by investors. In the United States, there are roughly eighty-two million SFHs. But what portion is used as rentals?
As per recent insights from SFR Investor, approximately sixty-eight million (82.93%) SFHs are owner-occupied, meaning the homeowner resides in the property. Subtracting this from the total SFH count leaves approximately fourteen million SFHs designated as rentals.
Do institutional investors own all these fourteen million homes? Not by a long shot. There are four investor categories:
1. Mom & pop investors: 1-9 SFRs
2. Regional investors: 10-99 SFRs
3. Smaller national investors: 100-999 SFRs
4. Institutional investors: Over 1,000 SFRs
Breaking it down, not all investors fall into the institutional bracket. The percentages of rental homes owned by each investor type paint a clearer picture (refer to the chart):
The chart shows that contrary to media portrayals, the vast majority of rental homes aren't under the ownership of large institutional investors. Instead, most belong to small-scale mom & pop investors, akin to your acquaintances.
In essence, everyday individuals like you view homeownership as an investment opportunity. Some might have seen a chance to acquire a second home for rental income. Others chose to retain their initial property instead of selling it when upgrading.
So, don't buy into the hype about institutional investors monopolizing the housing market. The numbers speak otherwise; they represent the smallest slice of the pie.
While institutional investors have a role in the single-family rental sector, they're not monopolizing all available homes. For further insights into the housing market buzz, consult a reliable real estate professional for the context you seek.