The Biden administration is pushing to block large investors, including real estate investment trusts (REITs) like $INVH and $SFR, from buying more single-family homes, in a bid to protect mom-and-pop landlords and first-time homebuyers. This move comes as the US housing market continues to grapple with a severe shortage of affordable homes, with the national homeownership rate dropping to 65.4% in the fourth quarter of 2022, according to data from the US Census Bureau.
The single-family rental market has seen significant growth in recent years, with large investors like Blackstone and Invitation Homes buying up thousands of homes, often outbidding individual buyers. This has led to concerns that these large investors are pricing out first-time homebuyers and mom-and-pop landlords, who are struggling to compete with the deep pockets of these institutional investors. According to a report by the Urban Institute, the share of single-family homes owned by investors has increased from 11.7% in 2010 to 16.1% in 2020.
The Biden administration’s push to block large investors from buying more single-family homes is part of a broader effort to address the affordable housing crisis in the US. The administration has proposed a number of measures, including increasing funding for affordable housing programs and implementing new regulations to limit the ability of large investors to buy up single-family homes. The National Association of Realtors has expressed support for the administration’s efforts, citing concerns that large investors are driving up home prices and making it harder for individual buyers to enter the market.
The impact of the Biden administration’s efforts on the single-family rental market is still unclear, but it could have significant implications for investors like $INVH and $SFR, which have built their businesses on buying and renting out single-family homes. According to a report by Goldman Sachs, the single-family rental market is expected to continue growing in the coming years, with the number of single-family rental homes increasing by 10% annually through 2025.
| Company | Number of Homes Owned | Market Value |
|---|---|---|
| $INVH | 80,000 | $20 billion |
| $SFR | 50,000 | $15 billion |
Looking ahead, the Biden administration’s efforts to block large investors from buying more single-family homes could lead to increased opportunities for mom-and-pop landlords and first-time homebuyers, but it could also lead to increased costs and regulatory burdens for large investors. The administration’s plans are still in the early stages, and it remains to be seen how they will be implemented and what impact they will have on the single-family rental market.
⚡ Why it matters: The Biden administration’s push to block large investors from buying more single-family homes could have significant implications for the US housing market and the single-family rental industry. The move could lead to increased opportunities for mom-and-pop landlords and first-time homebuyers, but it could also lead to increased costs and regulatory burdens for large investors.
📊 By the numbers:
65.4%: the national homeownership rate in the fourth quarter of 2022
16.1%: the share of single-family homes owned by investors in 2020
10%: the expected annual growth rate of the single-family rental market through 2025
🔗 Source: US Census Bureau*
