Wall Street has purchased hundreds of thousands of single-family homes since the Great Recession.• https://www-cnbc-com.cdn.ampproject.org by Carlos
Corporations backed by private equity groups such as Blackstone and Pretium Partners bought tens of thousands of homes across the U.S. Sun Belt.
Prices for detached homes have increased faster in key Sun Belt states than the national average.
Institutional investors do not yet control a large market share in housing, but analysts writing at MetLife Investment Management suggest they could by 2030.
Institutional investors may control 40% of U.S. single-family rental homes by 2030, according to MetLife Investment Management. And a group of Washington, D.C., lawmakers say Wall Street needs to back away from the market.
"What we're saying is don't have private equity buying up single-family homes," said Rep. Ro Khanna, a Democrat representing California's 17th Congressional District. Khanna is the lead author of the Stop Wall Street Landlords Act of 2022. "What's outrageous is your tax dollars are helping Wall Street buy up single-family homes," he said in an interview with CNBC.
The single-family rental industry got its start with government backing in the fallout after the 2008 financial crisis. "It was that rare opportunity that attracted the institutions to build a portfolio out of these foreclosed properties," said Steven Xiao, an assistant professor of finance and managerial economics at the University of Texas at Dallas.