How many single-family homes are owned by investors in the US?
According to national data provider
The overall market share of investors has grown since 2000 and is currently around 30%, as seen in the chart below, but the vast majority are small mom and pop investors. The chart below from John Burns Real Estate is another great illustration of this point.
44% of All Single-Family Home Purchases Were by Private Equity Firms in 2023 | Hacker News. No idea where they got that stat from because it's not supported by anything they've linked to.
A recent report from the Urban Institute, a left-leaning think tank, found that there were 574,000 single family homes nationwide owned by large institutional investors of at least 100 properties as of June 2022. The report found that this made up 3.8 percent of single-family rentals.
As of August 2022, single-family rental properties within institutional portfolios accounted for 3 percent of investor-owned homes nationwide. Institutional investor portfolios remained relatively small by market share as of August 2022, but several notable exceptions exist.
Invitation Homes, the nation's largest owner of single-family rentals with nearly 85,000 houses, is having a hard time finding properties to buy — and has been turning to homebuilders to help it bolster its offerings to clients.
Why is Wall Street buying houses? Wall Street is buying more single-family rental homes because demand for houses is high, renters' preferences are shifting away from apartments, interest rates are low, and big data is making it easier than ever for firms to conduct due diligence and manage these properties.
Institutional investors — such as hedge funds, private equity firms, and endowments — owned an estimated 574,000 properties as of June 2022, according to the Urban Institute. For reference, Realtor.com data revealed a total of 754,846 active property listings in November 2023.
While it is true that Blackrock does not own houses or own companies that own houses, they do invest in companies that own houses. Blackrock owns 6.7% of American Homes for Rent, which owns 59,000 homes in the United States.
In fact, institutional investors like BlackRock collectively own less than 3% of single-family homes across the United States. BlackRock's real estate portfolio does not focus on the direct acquisition of individual houses, debunking another common misunderstanding.
Why are hedge fund owners so rich?
Hedge funds seem to rake in billions of dollars a year for their professional investment acumen and portfolio management across a range of strategies. Hedge funds make money as part of a fee structure paid by fund investors based on assets under management (AUM).
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.
BlackRock's Stance: Not Buying Individual Houses
BlackRock emphatically states that it is not engaged in the purchase of individual houses in the U.S. The company stresses that it is often mistaken for other large asset managers and private equity firms actively involved in acquiring single-family residences.
At the very least, the overall presence in California appears to be less than 1%.
The single-family housing construction (individual houses) market size has grown strongly in recent years. It will grow from $794.32 billion in 2023 to $838.97 billion in 2024 at a compound annual growth rate (CAGR) of 5.6%.
Incredibly, 86.5% of all rental properties in the nation contain just one unit. And of those small rental properties, 70 percent, or 15.9 million, are owned by individual investors. According to the report, there are an estimated 2.2 million two to four-unit properties in the United States.
The Biltmore Estate is the largest privately owned home in the United States. Built near Asheville, North Carolina, it is still owned by the descendants of one of America's richest families, the Vanderbilts. It is a tourist attraction and a reminder of the so-called Gilded Age of the late 19th century.
Blackstone Group is by far the biggest buyer of single family houses with an estimated $2.5 billion totaling up to 16,000 single-family houses and they are currently in Atlanta GA, Chicago IL, Las Vegas NV, Phoenix AZ, and Inland Empire, LA, Sacremento Valley, Bay Area, Central Valley California, Miami Orlando and ...
But first-time home buyers, especially millennials and Gen Xers, are facing an uphill battle when it comes to house hunting. This is in part because of a growing trend in which baby boomers, the generation that owns the largest share of American homes, are planning to stay put.
For perspective, in 2021 and 2022, around 80% of large investors purchased properties with cash. However, large investors are continuing to pull back amid less-certain conditions in the housing market.
Why real estate investors stopped buying?
In certain U.S. cities, sky-high house prices and elevated mortgage rates have diminished homebuyer demand, forcing investors to sell homes at a loss.
Because of the many tax benefits, real estate investors often end up paying less taxes overall even as they are bringing in more income. This is why many millionaires invest in real estate. Not only does it make you money, but it allows you to keep a lot more of the money you make.
Current State. According to data reported by the PEW Trust and originally gathered by CoreLogic, as of 2022, investment companies own about one fourth of all single-family homes.
New York accounts for just under half of all US hedge fund industry assets (page 5); Connecticut is home to the two largest hedge fund managers in the world (page 6).
Which States have the highest number of businesses in the Hedge Funds industry in the United States? California (4,432 businesses), Texas (3,467 businesses) and New York (2,730 businesses) are the States with the most number of Hedge Funds businesses in the US.
