If you’re thinking about buying a home, you may find yourself interested in the latest real estate headlines so you can have a pulse on all of the things that could impact your decision. If that’s the case, you’ve probably heard mention of investors, and wondered how they’re impacting the housing market right now. That could leave you asking yourself questions like:
- How many homes do investors own?
- Are institutional investors, like large Wall Street Firms, really buying up so many homes that the average person can’t find one?
To answer those questions, here’s the real story of what’s happening based on the data.
Let’s start with establishing how many single-family homes (SFHs) there are and what portion of those are rentals owned by investors. According to SFR Investor, which studies the single-family rental market in the United States, there are eighty-two million single-family homes in this country. But how many of them are actually rentals?
According to data shared in a recent post, sixty-eight million (82.93%) of those homes are owner-occupied – meaning the person who owns the home lives in it. If you subtract that sixty-eight million from the total number of single-family homes (82 million), that leaves just about fourteen million homes left that are single-family rentals (SFRs).
Do institutional investors own all of those remaining fourteen million homes? Not even close. Let’s take it one step further. There are four categories of investors:
- The mom & pop investor who owns between 1-9 SFRs
- The regional investor who owns between 10-99 SFRs
- Smaller national investor who owns between 100-999 SFRs
- The institutional investor who owns over 1,000 SFRs
These categories show that not all investors are large institutional investors. To help convey that even more clearly, here are the percentages of rental homes owned by each type of investor (see chart below):
As you can see in the chart, despite what the news and social media would have you believe, the green shows the vast majority are not owned by large institutional investors. Instead, most are owned by small mom & pop investors, like your friends and neighbors.
What’s actually happening is, that there are people out there, just like you, who believe in homeownership, and they view buying a home (or a second home) as an investment. Maybe they saw an opportunity to buy a second home over the last few years to use it as a rental and generate additional income. Or maybe they just decided to keep their first house rather than sell it when they moved up.
So, don’t believe everything you read or hear about institutional investors. They aren’t buying up all the homes and making it impossible for the average person to buy. That’s just not what the numbers show. Institutional investors are actually the smallest piece of the pie chart.
While it’s true that institutional investors are a player in the single-family rental marketplace, they’re not buying up all of the houses on the market. If you have other questions about things you’re hearing about the housing market, connect with a trusted real estate professional so you have an expert to give you the context you need.
Countless people have set out on the exciting journey of homeownership. Ask around and you’ll find the vast majority are thankful they took the leap and bought a home. But why? It’s because of the many emotional and lifestyle benefits that come with being a homeowner.
So, if you’re trying to decide if you want to rent or buy a home, here are just a few of the many benefits you could look forward to if you buy.
It’s a Safe Haven
Owning a home goes beyond just having a roof over your head. It provides a sense of security and safety. In fact, in a survey from Fannie Mae, respondents say “having a sense of privacy and security” is one of the top reasons homeownership is preferred to renting. And in a different Fannie Mae survey, “living in a place where you and your family feels safe” is another one of the top benefits of homeownership.
Your home is a place where you can truly relax and unwind. Knowing that you have a sanctuary to return to at the end of the day is a great source of comfort.
It’s a Canvas for Self-Expression
For many homeowners, their home is a reflection of who they are. The National Association of Realtors (NAR), says:
“The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.”
From the color of the front door to the art hanging on the walls, every detail contributes to a unique expression of personal style. Put simply, owning a home gives you the freedom to make changes and improvements that resonate with your personality.
It Helps You Feel More Connected to the Community
Stability is another cornerstone of homeownership. The longer you stay put, the more emotionally connected you are to your community. For example, if your neighborhood does cook-outs, block parties, or other events, you’ll feel more engaged and probably build meaningful relationships with those around you. As NAR states:
“Remaining in one neighborhood for several years allows you and your family time to build long-lasting relationships within the community.”
The sense of community where you can make life-long friends helps give you more stability and predictability than you’d have if you move each time a rental lease renews.
Its Where Lifelong Memories Are Made
Not to mention, your home is where you’ll make many memories. It’s a backdrop for the stories of your life. Celebrating milestones, hosting gatherings, and building a treasure trove of special moments within the walls of your home is a heartwarming experience to be thankful for.
As you start thinking about buying a home, remember why so many people are glad they did. Homeownership isn’t just a financial decision. It’s about having a stable place where you can make lasting memories. If you’re thinking of buying a home and want advice, talk with a trusted real estate agent.
Life is a journey filled with unexpected twists and turns, like the excitement of welcoming a new addition, retiring and starting a new adventure, or the bittersweet feeling of an empty nest. If something like this is changing in your own life, you may be considering buying or selling a house. That’s because through all these life-altering events, there is one common thread—the need to move.
Reasons People Still Need To Move Today
According to the National Association of Realtors (NAR) there have been a lot of this type of milestone or life change over the last two years (see graph below):
And, these big life changes are going to continue to impact people moving forward, even with the current affordability challenges brought on by higher mortgage rates and rising home prices.
As Claire Trapasso, Executive News Editor at Realtor.com, says:
“Because high mortgage rates, elevated home prices, and stubbornly low inventory make today’s housing market particularly challenging, many of today’s buyers are motivated by life changes, such as growing families, supporting elderly parents or grown children, or accommodating professional needs. . .”
Lean On a Real Estate Professional for Help
Whether you’re beginning your search for a home or preparing to sell your current house, you don’t have to go it alone. With their expertise, a real estate agent is an invaluable partner who can help you smoothly transition through these big moments in your life. Here are just a few examples.
When Buying a Home
If you’re welcoming a new addition and want more space, the need for a new home may be a top priority. While higher home prices and mortgage rates are creating challenges for buyers, you may have to find a way to meet your changing needs, even with today’s mortgage rates.
A skilled real estate agent can help. Their expertise and knowledge of the local housing market can save you a considerable amount of time and stress. An agent will take the time to understand your specific needs, budget, and preferences, allowing them to narrow down your search and present you with suitable options.
When Selling a House
If you’re retiring or going through a separation or divorce, your main focus may be to make the most out of your investment when selling your house, so you can find one that works better for you moving forward.
This is another place where a real estate agent’s expertise truly shines. They can accurately assess your home’s market value, suggest improvements to enhance its appeal, and craft a strategic marketing plan. Their negotiation skills are a big asset when it comes to making sure you get a fair price for your house, allowing you to move on to the next chapter of your life with confidence and peace of mind.
No matter your situation, lean on a trusted professional for help as you buy or sell a home.
If recent life-changing events have you wanting or needing to move, connect with a local real estate agent.
For more than 79 years, Veterans Affairs (VA) home loans have helped millions of veterans buy their own homes. If you or someone you care about has served in the military, it’s essential to learn about this program and its advantages.
Here are some important things to know about VA loans before you buy a home.
The Many Advantages of VA Home Loans
VA home loans provide a pathway to homeownership for those who have served our nation, and they’re a great benefit for buyers who qualify. According to the Department of Veteran Affairs:
- Options for No Down Payment: Qualified borrowers can often purchase a home with no down payment. That’s a huge weight lifted when you’re trying to save for a home.
- Limited Closing Costs: There are limits on the types of closing costs you pay when you qualify for a VA home loan. So, more money stays in your pocket when it’s time to seal the deal.
- Don’t Require Private Mortgage Insurance (PMI): Many other loans with down payments under 20% require PMI. VA loans do not, which means veterans can save on their monthly housing costs.
A recent article from Veterans United sums up just how impactful this loan option can be:
“For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. These flexible, $0-down payment mortgages have helped more than 24 million service members become homeowners since 1944.”
Owning a home is the American Dream. Veterans sacrifice a lot to protect our country, and one way we can show our appreciation is by making sure they know all the benefits of VA home loans. Thank you for your service.
According to the latest data from Fannie Mae, 23% of Americans still think home prices will go down over the next twelve months. But why do roughly 1 in 4 people feel that way?
It has a lot to do with all the negative talk about home prices over the past year. Since late 2022, the media has created a lot of fear about a price crash and those concerns are still lingering. You may be hearing people in your own life saying they’re worried about home prices or see on social media that some influencers are saying prices are going to come tumbling down.
If you’re someone who still thinks prices are going to fall, ask yourself this: Which is a more reliable place to get your information – clickbait headlines and social media or a trusted expert on the housing market?
The answer is simple. Listen to the professionals who specialize in residential real estate.
Here’s the latest data you can actually trust. Housing market experts acknowledge that nationally, prices did dip down slightly late last year, but that was short-lived. Data shows prices have already rebounded this year after that slight decline in 2022 (see graph below):
But it’s not just Fannie Mae that’s reporting this bounce back. Experts from across the industry are showing it in their data too. And that’s why so many forecasts now project home prices will net positive this year – not negative. The graph below helps prove this point with the latest forecasts from each organization:
What’s worth noting is that, just a few short weeks ago, the Fannie Mae forecast was for 3.9% appreciation in 2023. In the forecast that just came out, that projection was updated from 3.9% to 6.7% for the year. This increase goes to show just how confident experts are that home prices will net positive this year.
So, if you believe home prices are falling, it may be time to get your insights from the experts instead – and they’re saying prices aren’t falling, they’re climbing.
There’s been a lot of misleading information about home prices over the past year. And that’s still having an impact on how people are feeling about the housing market today. But it’s best not to believe everything you hear or read.
If you want information you can trust, turn to the real estate experts. Their data shows home prices are on the way back up and will net positive for the year. If you have questions about what’s happening in your area, connect with a local real estate agent.