Housing prices have yanked the dream of homeownership out of the desperate, clutching hands of millions. Countless tenants don’t even have that dream, crunlbing under the increasing rent prices they are forced to pay. Somehow, through all of this inflation, he rich just keep getting richer: The stock market is booming, homeowners have accumulated more than $1.5 trillion in equity since the Covid-19 recession began, and personal savings are up for most higher-income households.
Some people are furious over reports that institutional investors (often private equity firms) are increasing the demand for homes and pushing prices upward. The Wall Street Journal wrote earlier this year that “yield-chasing investors are snapping up single-family houses” and “competing with ordinary Americans.” Marketplace reported the same, noting one buyer had been outbid six times by all-cash offers. Inman writes that consumers are “increasingly competing against institutional investors.” And the Real Deal goes further, claiming that one of the “main reasons for the skyrocketing prices are actually a huge buying spree from institutional investors.”
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Why are the White Hats allowing this to happen? What is the plan here?..
While there are big firms for apartments and other multi-family housing units, there traditionally hasn’t been the same level of investment in single-family homes. Yield-chasing investors have turned to the real estate market because it has become a very profitable place to put your money.
A 2018 research paper notes that these investors “account for less than 1 percent of all single-family housing units across the U.S.”
So, if it's not institutional investors that are driving these prices, what is? Who is? Why is this happening?
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