Home ownership in the U.S. has dropped to its lowest point since 1995, and in recent months the continuing decline is blamed, at least in part, on investors who are buying large blocks of houses for rental purposes and bringing in sizeable profits for the landlords.
Figures from the U.S. Census Bureau show that at least one-quarter of a million homes have been bought and converted to rental use from one year ago, reducing homeownership to its lowest level in almost two decades. Overall, 65 percent of U.S. households owned their home in the second quarter of 2013, according to the Census Bureau. That’s down from a peak of 69.2 percent in 2004.
Investors, who often pay cash for homes, are “expected to continue driving housing demand through 2013,” according to CoreLogic.
The added pressure by investors is pushing up the cost of the homes in several markets, including California, Arizona, Nevada and Florida. The largest investor, the Blackstone Group, has purchased some 29,000 homes in 13 areas with 25,000 of these purchases made in the past year. Ten percent of the houses sold in the country’s busiest real estate markets were purchased by large corporations, investment trusts or partnerships, which often pay cash. This is making it harder for individual buyers to acquire homes.
The National Association of Realtors still sees a strong market for homebuyers. It reported recently that housing inventory increased slightly in June, putting more homes on the market and slowing the surge in prices. “Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand,” said NAR chief economist Lawrence Yun.
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