Comment by Aurornis
2 days ago
The vast majority of home purchases aren't from speculators or institutional investors.
Institutional investors only own about 0.5% of homes. If they're forced to stop buying, nothing will really change in a noticeable way. At best, small landlords and investors will scoop attractive properties up for slightly less.
Is that 0.5% a uniform distribution across the United States or is it concentrated in a handful of hot markets? I suspect the latter and have to imagine some distortion must be occurring in those regions.
Maybe the best part of this legislation will be that people will realize it's not institutional investors that are driving up home prices. No, that's far too optimistic.
When this doesn't make anything better, the conclusion won't be that it was a bad idea but that it somehow didn't go far enough.
Home affordability is getting better anyways, which is great, because we are finally having a surge in new & denser home building in popular regions and there mortgage rates are more reasonable than they were in the COVID-era.
> Institutional investors only own about 0.5% of homes
Where they buy those homes matters though. In areas with lots of jobs/growth (often the areas experiencing the most housing price pain), that number is likely much higher.