Is Wall Street Acquiring a Majority of Residential Properties in the United States?

Explore the latest real estate insights that could impact your home-buying decisions. Discover the influence of investors, including Wall Street firms, on the current U.S. housing market. We break down the data on home ownership and rentals, revealing that institutional investors aren't dominating as perceived. Dive into the categories of investors, highlighting the significant role played by small mom & pop investors. Get informed about homeownership and rental dynamics, separating fact from fiction. Rely on trusted real estate professionals for expert guidance in navigating the housing market intelligently.

Are you thinking of buying a new home? Staying updated on recent real estate news is crucial to understanding factors that might influence your decision. If you've come across discussions about investors and their impact on the housing market, you may be pondering questions such as:

  • How many homes do investors own?
  • Are institutional investors, like large Wall Street Firms, really buying up so many homes that the average person can’t find one?

To answer those questions, here’s the real story of what’s happening based on the data.  

To begin, let's determine the total count of single-family homes (SFHs) and the percentage that constitutes rental properties owned by investors. SFR Investor, specializing in the U.S. single-family rental market, reports a total of eighty-two million single-family homes in the country. The crucial question is: how many of them are actually rentals?

As outlined in a recent post, data reveals that sixty-eight million homes, equivalent to 82.93%, are owner-occupied, indicating that the homeowner resides in the property. By subtracting this figure from the total count of single-family homes (82 million), we arrive at approximately fourteen million homes classified as single-family rentals (SFRs)..

Do institutional investors own all of those remaining fourteen million homes? Not even close. Let’s take it one step further. There are four categories of investors:

  • The mom & pop investor who owns between 1-9 SFRs
  • The regional investor who owns between 10-99 SFRs
  • Smaller national investor who owns between 100-999 SFRs
  • The institutional investor who owns over 1,000 SFRs

These categories show that not all investors are large institutional investors. To help convey that even more clearly, here are the percentages of rental homes owned by each type of investor (see chart below):

 

Looking at the chart, it's clear that despite what the news says, most homes aren't owned by big companies. Instead, regular folks, like your friends and neighbors, own the majority.

What's really happening is that people, just like you, believe in owning a home. They see buying a home, maybe even a second one, as a good investment. Some saw a chance to get a second home in the past few years for extra income by renting it out. Others just decided to keep their first house instead of selling it when they moved up.

So, don’t believe everything you read or hear about institutional investors. They aren’t buying up all the homes and making it impossible for the average person to buy. That’s just not what the numbers show. Institutional investors are actually the smallest piece of the pie chart.

Bottom Line

Sure, institutional investors do play a role in the single-family rental market, but they're not grabbing every house available. If you have more questions about what's going on in the housing market, reach out to a reliable real estate expert for the context you're looking for.

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