Institutional investors are eyeing Houston’s high rental home demand and are quickly purchasing single family homes to convert into rental units, according to a recent story by Community Impact.
Community Impact, July 8, 2022: Increasing investor purchases of single-family homes contributing to rise in rentals across Houston
“The Houston Association of Realtors reported June 15 the number of leased single-family home rentals increased 24.8% from May 2021 to May 2022. While rising mortgages and low inventory are contributing to the trend, experts said potential homebuyers are also facing competition from real estate investment firms—or institutional investors—buying properties to sell or lease,” according to Community Impact.
Nadia Evangelou, the director of forecasting at the National Association of Realtors, added in the article that the purchasers of these single family homes “are not mom and pop buyers. They look to buy properties and communities on a large scale and make profit from them.”
“The impact has been sharpest in the single-family rental home industry, which was created by private equity firms,” Baker told Community Impact. “Just over a decade ago, no single landlord owned more than a thousand homes. Now, the top five—Invitation Homes, Pretium Partners, American Homes 4 Rent, Amherst Holdings and Cerberus Capital—together own or operate almost 300,000.”
Jim Baker, as well as other advocates and expert witnesses testified before the House Financial Services Committee in June about the stark rise in single family home purchasing by large private equity firms. You can find PESP’s full testimony here.
PESP has conducted extensive research on private equity and their dealings in the housing industry and the most recent reports can be found here.