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Are Large Investors Truly Dominating the Housing Market? - Local Social Pro

If you’re on the hunt for a house, you might be wondering if big investors are snatching up all the available homes, making it tougher for the average buyer. There’s been a lot of chatter online about this, but much of it is misinformation. Here’s the real story: the surge in investor activity is mostly behind us.

The Wall Street Journal (WSJ) sheds light on this:

“Investors of all sizes spent billions of dollars buying homes during the pandemic. At the 2022 peak, they bought more than one in every four single-family homes sold. More recently, however, their activity has slowed as interest rates rose and supply became tighter.”

The important takeaway is that investor activity has dropped significantly. Even at its peak, 75% of single-family homes were still purchased by regular buyers, not investors. Most of the investors buying homes over the past few years weren’t the large firms you often hear about but rather small, mom-and-pop investors. These are folks like your neighbors who might own just a couple of properties, including their main residence and perhaps a vacation home.

But what about the large, institutional investors – those mega-firms owning over 1,000 properties? Despite the hype on social media, they haven’t been buying as many homes as you might think. According to the Wall Street Journal, these institutional investors bought only about 2% of available single-family homes at their peak in 2022. Recently, that figure has shrunk so much it rounds down to 0%.

To understand why this percentage is decreasing, RCN Capital, a private lender, investigated the challenges investors face. Jeffrey Tesch, CEO of RCN Capital, explains:

“Investors are already facing many challenges in today’s housing market – rising prices, limited inventory, and higher financing costs.”

These challenges indicate that mega investors aren’t dominating the housing market.

So, don’t believe everything you hear. Big investors aren’t hoarding all the homes and blocking out regular buyers.

Bottom Line
Big investors aren’t buying up all the homes. If you have questions about the housing market, talk to a local real estate agent. They can provide clarity on what’s really happening.


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