If you’re considering buying a home, staying informed about real estate trends is crucial. Lately, there’s been talk about investors, particularly large Wall Street firms, influencing the housing market. Let’s delve into the facts to address common questions:
How many homes do investors own? According to SFR Investor, there are 82 million single-family homes (SFHs) in the United States. Of these, 68 million (82.93%) are owner-occupied, leaving around 14 million single-family rentals (SFRs).
Are institutional investors buying up most homes? Not at all. Investors fall into four categories: Mom & Pop (1-9 SFRs), Regional (10-99 SFRs), Smaller National (100-999 SFRs), and institutional (over 1,000 SFRs). Contrary to popular belief, large institutional investors own only a fraction of the remaining 14 million homes.
- Mom & Pop Investors: 37.3%
- Regional Investors: 35.4%
- Smaller National Investors: 19.8%
- Institutional Investors: 7.5%
This chart underscores that the majority of rental homes are owned by smaller-scale investors, not large institutions.
What’s Really Happening? Many everyday individuals, much like yourself, see homeownership as an investment opportunity. The green portion of the chart reveals that mom & pop investors, akin to your friends and neighbors, dominate the rental market.
People buy homes for various reasons—whether to generate rental income by investing in a second property or choosing to retain their first home when upgrading.
Despite media speculation, institutional investors aren’t monopolizing the housing market. They represent the smallest segment of the pie chart.
Bottom Line While institutional investors play a role in the single-family rental market, they are not the sole force behind the current housing landscape. If you have more questions or need context on housing market trends, let’s connect. Having an expert guide can help you make well-informed decisions.