Wall Street Suddenly Buying Fewer Single-Family Homes

Rising interest rates are having a major effect in the housing market—including on the large institutional investors who spent much of the past couple of years buying up single-family homes.

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November 27, 2022, 9:00 AM PST

By James Brasuell @CasualBrasuell


Cash Buyout

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“Investor buying of homes tumbled 30% in the third quarter, a sign that the rise in borrowing rates and high home prices that pushed traditional buyers to the sidelines are causing these firms to pull back, too,” reports Will Parker in a paywalled article published by the Wall Street Journal. “Companies bought around 66,000 homes in the 40 markets tracked by real-estate brokerage Redfin during the third quarter, compared with 94,000 homes during the same quarter a year ago.”

The decline was the largest in a quarter, other than the second quarter of 2020, since the subprime mortgage crisis that began the Great Recession.

Sources in the article credit the rising cost of loans as the reason behind the decline.

“At the same time, large rental landlords are coming under greater scrutiny from federal and local governments. Congressional Democrats have hosted a series of hearings focused on eviction practices and rent increases. Three Congress members from California this month introduced a bill called the ‘Stop Wall Street Landlords Act,’ which proposes levying new taxes on single-family landlords. It would prevent government-sponsored enterprises like Freddie Mac from acquiring and securitizing their debt.” The bill is expected to have a hard time achieving approval with a Republican majority in control of the House of Representatives.

Tuesday, November 22, 2022 in Wall Street Journal

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