Comment by bryanlarsen 4 days ago
Don't more than 27% of Americans rent rather than own the housing they live in? It appears 36% rent. Doesn't this mean that the share of owner-occupied housing is going down, not up as the headline implies and readers are assuming?
I would expect investors to sell houses quicker than owner occupiers. Yes, some investors hold for a while, but there are enough that flip homes within months that I expect their average to be fairly low.
I can't vouch for what readers are assuming, but the headline is intended to say that more people are renting because more homes are going to institutions who don't occupy them.
The implication is that this drives up the price for renters, because the demand side includes not just money from people seeking a place to live, but much larger amounts of money from other markets.
If those homes had been purchased by an owner occupiers, then there would be that many fewer homes for rent, causing rent to go up.
The implication of these article is always that investors are somehow unfairly competing against homeowners. But there is only one fixed pool of people competing for housing - something that reduces supply for buyers is increasing it for tenants and vice versa.
Sure but that is also true going the other way.
There's a fixed pool of ppl who need housing (aka the entire population of the country) and a relatively fixed pool of interior floorspace to divvy up among them.
Whether each person chooses to/prefers to/is forced to rent or buy is not the driving force behind rent and price changes
Rents & prices are moving because the amount of floorspace that exists (in places people want to live) is much lower than the aggregate amt of floorspace people would like there to be. Each month, everyone who needs to buy/sell/rent is forced to play a game of musical chairs. If you don't have a lot of $, you are going to be one of the people w/no chair, and be forced to leave.
In any normal market this would trigger vast increases of floorspace (or chair) manufacturing, but in the anglosphere we have convinced ourselves that there is only one true way to live - in a square box with a triangle on top - and we forbid almost every other form on most land, making it extremely difficult to increase the # of chairs.
If 27% of new homes are purchased by investors and 36% of old homes are owned by investors, then math says that this lowers the percentage of homes owned by investors. (27% * x + 36% * y) / (x + y) -> a number between 27 and 36.
You can’t extrapolate anything about owner occupancy rate broadly from this stat because it’s about who _bought_ in a short period.
If 28% of sellers that quarter were investors then the owner occupancy rate went up.
Now I suspect that’s not the case but if you look at home ownership rates for non-investors they stay in a very tight couple of % points in the mid 60s and they track interest rates. This has been true since the US started making home ownership a governmental priority post ww2.
Prior to that it was in the 40s for as far back as I could find any data.