As Americans struggle with record high home prices and historically low home affordability, a possible scapegoat is emerging. Some lawmakers in Congress and at the state level want to crack down on Wall Street investment firms buying up homes. The trend of corporate home purchases surged during the pandemic, as companies used lucrative cash offers to snatch up hundreds of thousands of homes and rent them out. Critics say this is contributing to rising housing costs by reducing inventory and hurting property values by filling neighborhoods with renters. Even Texas Gov. Greg Abbott is calling for action on this in the next legislative session, writing on X, "Corporate large-scale buying of residential homes seems to be distorting the market and making it harder for the average Texan to purchase a home."
But the trend of corporate homebuying may be fixing itself, according to Ted C. Jones, retired former economist at Stewart Title and real estate expert. "If you look at Invitation Homes---one of the biggest corporate homebuyers---they've actually been selling their individual single-family homes, and they are reinvesting in communities that are built to rent," he says.
Jones tells KTRH these companies are realizing that it's much cheaper to do upkeep and management on an apartment or condo community than on several homes spread out over thousands of miles. "Instead of just driving a golf cart around the complex to do maintenance, you have to drive vehicles long distances, so it costs you a lot more to repair that house," he says. "So what we're seeing now is Wall Street firms are actually reinvesting into built-to-rent communities."
As for potential legislation, a group of House Democrats have proposed a bill to cap the number of homes large companies can own. But Jones thinks that would likely do more harm than good by interfering with the private housing market. "The government and Congress have a lot more important things to do right now than rental housing," he says. "Focus on your own rental housing through the Federal Housing Agency, and get out of our business."