Corporations Want You to Rent, Not Own. Can Lawmakers Stop Them?
This article was first published on NerdWallet.com.
If you rent a house when you would rather own, pin some of the blame on corporate landlords.
The 10 biggest institutional investors owned more than 430,000 single-family rental homes at the end of 2023, and they continue to acquire houses to rent out to middle-class families. Corporate landlords seek to dominate the neighborhoods they target, simultaneously reducing the inventory of houses to buy while expanding the stock of houses to rent.
Members of Congress have introduced bills to force the largest institutional investors to dramatically cut their holdings.
Renting costs less than buying
The United States suffers from a housing shortage of between 1.5 million and 5.5 million units, depending on whom you ask. Institutional investors benefit from the shortage because it pushes prices higher, making homeownership unaffordable for many. The median home resale price rose to a record $419,300 in May, according to the National Association of Realtors. Mortgage rates have remained above 6.5% since May 2023.
Consequently, it costs more to buy a starter home than to rent in the 50 largest metro areas, according to a Realtor.com report in March. According to Zillow, the median rent for a three-bedroom house was $2,200 in June. That's $32 less than the principal-and-interest payment on a median-price house at the average mortgage...