As policymakers continue to debate the role of Wall Street investors in the residential real estate market, one analysis confirms what many housing observers have argued for some time: Institutional investors make up a small – even shrinking – portion of home purchases.
The report, released March 13 by economists at Realtor.com, found that investors who have bought more than 350 single-family homes since 2015 account for only 1% of total purchases nationwide. What's more, their purchasing activity has been steadily declining since peaking in 2021.
“Large corporate investors are often viewed as a primary driver of today’s housing affordability challenges, but the data show their footprint is relatively small,” said Danielle Hale, chief economist at Realtor.com, in a release accompanying the report.
The report was released one day after the U.S. Senate passed the 21st Century ROAD to Housing Act, the first broad bipartisan housing legislation in over a decade. Among the bill’s provisions is one restricting the purchase of new single-family homes by large institutional investors that directly or indirectly own at least 350 single-family homes.
It does provide exemptions, “including for large institutional investors seeking to purchase or build new single-family homes specifically for the rental market, but requires these properties to be sold to an individual homeowner after seven years,” according to a summary from the Bipartisan Policy Center.
