Can Limiting Hedge Funds From Buying Homes Lower Housing Prices?
Since large institutions make up just 13% of all investor homebuyers, their impact on rising home prices may not be as significant as some believe
May 11, 2024
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New legislation proposes to ban Wall Street hedge funds from buying up single-family homes, but one economist argues that this may not have a significant impact on rising housing prices. According to housing market platform Realtor.com, Capital Economics property economist Thomas Ryan claims housing market inflation is likely not caused by large institutions. This is because small landlords with less than 10 properties make up a majority of home purchases, accounting for nearly 68% of all single-family investment purchases in the first three quarters of 2023.
The analysis comes as Democrats in the U.S. House and Senate push legislation that would force large institutional investors to sell off their single-family homes to family buyers.
One such bill, the End Hedge Fund Control of American Homes Act, would impose steep penalties on hedge funds that own any number of single-family homes, as well as other institutions that own more than 50 homes.
