Let’s Make a Game Plan
Boost your investment game with expert real estate insights. We'll keep you up to date on everything you need to know to be the smartest real estate investor you can be.
There is a widespread belief that large investors are buying up all the homes in the country and keeping average homebuyers from getting the homes they want. This is not true. As the Wall Street Journal, John Burns Research & Consulting, and Resiclub report, even during the investor buying "frenzy" in 2022, 75% of all single-family homes were purchased by regular buyers, not investors. The vast majority of those investors were not large institutional investors (i.e. those who own 1,000+ properties) but small investors who own between one and nine homes.
At the peak of the pandemic housing boom of early 2022, institutional buyers made up just over 3% of all home purchases. Over the past year, these same institutional buyers have accounted for just around 1% of transactions.
This is the net number of homes institutional investors have purchased in the top 10 markets of investor activity in May, according to Resiclub:
- Atlanta, GA – 94
- Chicago, IL – 49
- Phoenix, AZ – 29
- Las Vegas, NV – 23
- Tampa, FL – 23
- Houston, TX – 18
- Orlando, FL – 16
- Cincinnati, OH – 16
- Memphis, TN – 15
- Jacksonville, FL – 11
Our take
This report goes a long way in changing the narrative about institutional investors blocking regular people from accessing the housing market investors. We all know investors don’t only buy houses—they sell them too, but headlines often report only on acquisitions, not net flows. Lawmakers in the House and Senate are apparently blithe to this fact. Many of them have even “sponsored legislation that would force large owners of single-family homes to sell houses to family buyers” – as if institutional investors aren’t doing so already. Because of the unfounded fear of investors taking over the market, legislators across the country are taking unnecessary action to curb this “problem.” Unfortunately, politicians in both red and blue states are passing laws to drive out real estate investors through heavy taxation and other legislative measures. This shouldn’t be happening, but it is.