Legislation Would Counter Home Sales to Investors

In 2022, the buyers took one in four single-family homes off the market
By Bob Cronin,  Newser Staff
Posted Apr 29, 2024 6:39 PM CDT
Wall Street's Homebuying Catches Lawmakers' Attention
Stock image   (Getty/Phototreat)

Bills have been introduced in Congress and state legislatures to stop large investors from snapping up residential real estate. Backers say investment firms backed by Wall Street money have bought hundreds of thousands of houses with billions in all-cash offers. The practice wipes out inventory and pushes prices up, the Wall Street Journal reports, and makes it tougher for first-time buyers to crack the market. In 2022, the biggest year, investors grabbed more than one in every four single-family homes sold in the US. So far, none of the legislation has gotten as far as a floor vote.

Opponents of the proposals, some of which would slap heavy taxes on the investors, say the sales are dropping anyway in the face of rising interest rates and dwindling supply. "The great trade is done," said John Burns, a researcher and consultant. "So what are you trying to stop?" On the other hand, smaller investors that own 10 to 99 homes are buying more property, he said; some proposals would seek to limit them, as well. Institutional investors are those that own at least 1,000 homes; some studies have shown they now have 3% to 5% of the nation's rental homes.

The US Department of Housing and Urban Development found that 21% of Atlanta-area rental homes were owned by a large institution in 2022, per the Journal. Rep. Nikema Williams, who represents the area, said her US House bill, if enacted, "won't solve all of the problems, but it will definitely make an impact." (More home sales stories.)

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