Are Large Investors Buying Up All the Homes in America?

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If you're in the market to buy a home, you've probably come across discussions about the influence of investors on the housing market. Questions like, "How many homes do investors own?" and "Are institutional investors, such as large Wall Street firms, really buying up so many homes that it's becoming impossible for the average person to find one?" might have crossed your mind. In this article, we'll delve into the data to provide you with a clear understanding of the current scenario.

The Landscape of Single-Family Homes

Before we analyze the role of investors, it's essential to grasp the landscape of single-family homes (SFHs) in the United States. According to data from SFR Investor, an authority on the single-family rental market, there are a staggering eighty-two million single-family homes in the country. However, the key question is, how many of these homes are available for rent?

Recent data reveals that approximately sixty-eight million (82.93%) of these homes are owner-occupied, meaning the individuals who own these properties reside in them. To determine the number of single-family rentals (SFRs), we need to subtract the owner-occupied homes from the total. This calculation leaves us with approximately fourteen million homes that are designated as single-family rentals.

The Different Types of Investors

Now, let's dispel a common misconception – not all rental homes are owned by large institutional investors. In fact, there are four distinct categories of investors in the real estate market:

1. Mom & Pop Investors

  • These individuals own between 1-9 SFRs.

2. Regional Investors

  • They own between 10-99 SFRs.

3. Smaller National Investors

  • This category comprises investors who own between 100-999 SFRs.

4. Institutional Investors

  • Institutional investors own over 1,000 SFRs.

To provide a clearer perspective, let's examine the percentages of rental homes owned by each category of investor:

  • Mom & Pop Investors: 1-9 units
  • Regional Investors: 10-99 units
  • Smaller National Investors: 100-999 units
  • Institutional Investors: 1000 or more

Dispelling Myths About Institutional Investors

Contrary to what you might have come across in the news or on social media, the data shows that the vast majority of rental homes are not owned by large institutional investors. Instead, most of these properties are in the hands of small mom-and-pop investors – individuals much like your friends and neighbors.

The reality is that there are people out there, just like you, who view homeownership as a sound investment. Some have taken the opportunity to purchase a second home in recent years, intending to rent it out and generate additional income. Others have chosen to retain their first home as an investment rather than selling it when they moved up the property ladder.

Institutional Investors: A Smaller Piece of the Pie

So, are institutional investors truly buying up all the available homes, making it nearly impossible for the average person to buy? The answer is a resounding no. Institutional investors represent only a small fraction of the pie chart when it comes to the ownership of rental homes.

Institutional investors, while playing a role in the single-family rental marketplace, are not the dominant force. The data unequivocally demonstrates that the majority of rental properties are owned by individuals or smaller entities. The idea that institutional investors are monopolizing the housing market is simply not supported by the numbers.

In summary, it's essential to have a well-informed perspective on the real estate market. While institutional investors do participate in the single-family rental marketplace, they are by no means the primary driving force behind it. The majority of rental homes are owned by individuals who believe in the value of homeownership and have chosen to invest in real estate for various reasons.

If you have additional questions or concerns about the housing market, it's advisable to seek guidance from a trusted real estate professional. They can provide you with the expert insights and context you need to make informed decisions in your real estate endeavors.

In conclusion, the real estate market is diverse and multifaceted, with various types of investors contributing to its dynamism. Dispelling the myth of institutional dominance allows for a more accurate understanding of the true nature of the market. 

To learn more about the Prescott, Arizona real estate market contact Michael Eastwood CEO of West USA Realty of Prescott at 928-636-1500 or visit us at www.westusaofprescott.com  and Michael will introduce you to one of his professional real estate agents. (Each office is Independently owned and operated) #RealEstateTips #PrescottAZ #HashtagPower #BoostYourPosts #ViralContent #RealEstateSuccess #RealEstateReel #PrescottAZ #HashtagHacks #InstagramGrowth #ViralVisibility #FollowMe #PrescottRealEstate #ArizonaHomes #PrescottAZ #RealEstateForSale

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