Community Announcements

Posted on May 1, 2024 12:00 PM by Admin
Categories: General
By Will Parker, The Wall Street Journal

While homeowner associations for years have sought to stop investors from buying and renting out houses in their neighborhoods, legislative proposals in Congress and several states represent a new effort by elected officials to regulate Wall Street’s appetite for single-family homes.
This “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,” Republican Gov. Greg Abbott wrote on X last month. “This must be added to the legislative agenda to protect Texas families.”.
But is it all too little too late? Critics of proposed regulation by Congress and in several states note that many of the largest investors have bought very few or no homes in the past year.
“The great trade is done,” said John Burns, founder of a prominent national housing research and consulting firm bearing his name. “So what are you trying to stop?” 
Smaller investors who own between 10 and 99 homes have stepped up their share of home buying this year, Burns said. Some of the proposed legislation would also target these smaller investors.
There's definitely support for change among politically diverse parts of the electorate in a presidential election year.
Close to equal numbers of voting-age Republicans and Democrats said they would support a measure to block Wall Street firms from buying homes, according to a new study funded by the University of California, Santa Barbara, and the Manhattan Institute, a conservative think tank. The study gauged opinions from 5,000 renters and homeowners in urban and suburban ZIP Codes.
Gov. Abbott isn't the only one with misgivings, but will proposed legislation gain traction anywhere? None of the bills in Congress or in any of the state houses has reached a floor vote.
Investors of all sizes spent billions of dollars buying homes during the pandemic. At the 2022 peak, they bought more than one in every four single-family homes sold, though more recently their activity has slowed as interest rates rose and supply became tighter.
Lawmakers say that investors who have scooped up hundreds of thousands of houses to rent out are contributing to the dearth of homes for sale and driving up home prices. They argue that investor buying has made it harder for first-time buyers to compete with Wall Street-backed investment firms and their all-cash offers.
Two of the largest home-buying firms, Invitation Homes and AMH, are publicly traded companies, while a number of other companies, backed by private equity, hold portfolios of tens of thousands of homes nationwide.