Atlanta home purchases by investors exceed $1 billion in three months

Meanwhile, lawmakers have proposed limiting the number of single-family homes that institutional investors can buy. But the federal legislation has since stalled after Wall Street’s pandemic-era investment boom slowed.

However, the Redfin report, released in May, suggests an uptick in new home ownership by investors for the first time since mid-2022 – although purchases were only up 0.5 %.

The report was based on Redfin’s analysis of home purchase records in 39 of the most populous metropolitan areas in the United States. The company defined investor as “any institution or company that purchases residential real estate.”

David Howard, CEO of the trade association National Rental Home Council, which represents several corporate rental housing investors, said investor purchases were down from last year.

Housing supply is “at historic lows,” he said, and high mortgage rates are pushing the boundaries of what is affordable, making rental housing a key part of helping people access housing.

“In this environment, we must look for ways to expand the diversity of housing opportunities, so we can provide families with more options, not fewer,” he said.

But opponents of institutional investing say the impacts of investor ownership have worsened an already difficult environment characterized by high mortgage rates, a lack of inventory and few affordable housing options.

Taylor Shelton, a housing expert and assistant professor in Georgia State’s Department of Geosciences, said Redfin’s findings add to a “growing body of evidence” that institutional investment in Atlanta is stifling renters and people wishing to buy a house.

“Without meaningful action by our state and local governments to discourage these investors through regulation, they will continue to target metro Atlanta and reap record profits at the expense of regular workers who face to a rise in rents and property prices that far outstrips wage growth. ” Shelton wrote in an email.

There has been a legislative response to investors gobbling up single-family homes. Lawmakers in Congress proposed the End Hedge Fund Control of American Homes Act to impose limits on institutional investors.

Washington Congressman Adam Smith introduced the House version of the bill in December. His spokeswoman, Jaelin O’Halloran, said Smith would reintroduce the bill if it didn’t gain traction on its first try.

In a statement, Smith said people trying to buy a home shouldn’t have to compete with hedge funds.

“The significant increase in the number of large institutional investors and private equity firms purchasing single-family homes is accelerating our nation’s housing crisis to the detriment of potential buyers and renters,” he said in a statement.

Sen. Jeff Merkley of Oregon introduced the Senate version of the bill. He said communities in Georgia, his home state and countless others should care for families and not be “profit centers for hedge funds.” Wall Street’s investments in housing are contributing to soaring housing prices and rents, he added.

The question of investor ownership goes beyond partisan divisions. This year in Texas, Governor Greg Abbott urged lawmakers to act to reduce institutional investments and group purchases of residential housing.

Although a recent study found that Georgia was most exposed to risks from Wall Street investments in housing, state lawmakers have taken no significant steps to curb those investments.