New Data Show Robust Growth in Owner-Occupied Housing
Separately, the National Rental Home Council found that large investors are not exerting any kind of influence on the broader housing ecosystem.
In terms of the overall composition of America’s housing market, new Census Bureau data show owner-occupied housing now accounts for 58.4% of total housing, an increase over the five-year and three-year readings of 55.5% and 56.4%.
The current share of rental housing, 30.9%, represents a decrease from the previous five-year share of 31.9% and the prior three-year share of 31.2%.
Nonetheless, it is clear that there has been a significant wave of capital by institutional investors in the single family home space, with more than $30 billion in capital chasing the surging US rental housing market, according to John Burns Real Estate Consulting.
The National Rental Home Council dug deeper to determine how many single-family homes are being purchased by large investors based on reports from Redfin, CoreLogic and other data collectors.
“Using the Redfin figure of 68,000 investor homes purchased during the second quarter and multiplying it by the 20.2% of homes purchased by large investors, we are left with a total of 13,736 properties purchased by large investors.
“Dividing this by the total number of homes purchased in the quarter, 1,856,000, shows that a grand total of 0.74% of home purchases in the second quarter were made by large investors,” according to the NRHC.
Said another way, using this analysis, “99.26% of single-family homes purchased in the second quarter were made by someone, or some entity, other than a large investor.”
If this analysis serves as a credible approximation for large investor purchases in the single-family home market, it’s hard to see how one can make the case that large investors are in fact exerting any kind of influence on the broader housing ecosystem, the trade association concluded.
“Further, it is likely the case that some percentage of purchases by large investors—and probably a large percentage at that—are accounted for by the completion of newly-built single-family rental homes.”
Admittedly, NRHC said it’s difficult to tell when newly-built rental homes are logged as purchases in county-level home transaction records; but because of the robust amount of build-for-rent activity in the market, particularly among large investors, it is more than safe to assume new homes accounted for a meaningful portion of large investor activity. Which means, the impact of large investors on the market for existing home purchases was probably less than the 0.74% in its analysis.