Wall Street Is Squeezing Out First-Time Homebuyers
Build-to-rent is all the rage on Wall Street, reducing the number of houses available for individuals to buy at the lower end of the market.
Neighborhoods for rent.
Photographer: Ty Wright/Bloomberg
The rapid growth of the build-to-rent housing industry seems ominous for would-be homebuyers, particularly when the inventory for sale is so low. While the size of the industry is still small relative to the entire U.S. housing market, every little bit counts when rising demand is already pushing prices higher — especially for first-time homebuyers. Now with institutional investors such as KKR & Co. buying up houses to rent, the impact could be felt sooner than appreciated.
For a little perspective, there were 64,000 homes built to rent in the U.S. in 2020, up from 37,000 in 2017. That's significant growth in a few years, but in a country with over 80 million owner-occupied housing units, we're still talking about less than 0.1% of the existing stock.