re: WSJ: Wall Street Has Spent Billions Buying Homes. A Crackdown Is Looming.

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Difference is that typically if you hold and pay for a home, it will be an asset of value when it's paid for. Cars decline. I doubt (althought it's possible) that there has been a time when a home held for 30 years didn't increase in value.

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But that doesn’t mean the person paying on it “made” any money. Say a person buys a house at 425k 7.5% interest for 30 years (with 20% down). By the time they pay off the mortgage they will have spent well over a million dollars in payments (principal, interest, down payment) not to mention repairs, upgrades, taxes, upkeep, insurance, etc.

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The market and the people will always rectify a situation more quickly and efficiently, with less collateral damage, than the government.

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Government certainly hoses things, but I simply don’t believe in the God of the Self-Correcting Market anymore. The housing crash of ‘08 should have taught you that.

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But that doesn’t mean the person paying on it “made” any money. Say a person buys a house at 425k 7.5% interest for 30 years (with 20% down). By the time they pay off the mortgage they will have spent well over a million dollars in payments (principal, interest, down payment) not to mention repairs, upgrades, taxes, upkeep, insurance, etc.

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I completely understand this. But if you are paying more to rent than just your house payment, are you going to be saving enough to end up with an asset the equivalent of your home later? If you are, great. For a lot of people, that home is a large part of their retirement fund.

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Yes, and if they rent for 30 years they will have exactly $0 in rent.

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If you invest the down payment I mentioned above you’d have 700k or so after 30 years, maybe more.

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One of the reasons you own is that you lock in your payment. 7.5% is a lot, but in 15 years your payment is still locked in as the same and is not a lot. In 15 years your rent has still gone up and up and up. In 15 years you have $0 in assets from renting.

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In 15 years you’ll need a new roof, water heater, a/c, deck, flooring, etc.

People drastically underestimate the costs of home ownership and that’s one of the reason so many refinance or get a second mortgage or HELOC, to pay all those expenses.

Most people break even, at best, when owning a home long term. If they truly calculate their cost of ownership.

And your payment isn’t locked in, taxes go up, insurance goes up.

All those homes will be housing the illegals and the Gov’t will pay Blackrock large rental payments and the cycle will continue.

We are beyond screwed! If it weren’t for finishing raising my kids, I’d liquidate and go to Colombia, although they stole an election down there and I’m afraid it may move towards communism like its neighboring Venezuala was corrupted with Hugo Chavez in 1999 when they rigged the election with Dominion Voting machines.

The cost of living down there and other countries similar is unreal! You can live like a king for a fraction of the price here. And even the poverty folks are happy and you don’t see drug addicts everywhere and homeless camps. It’s an old school way of living that the USA has lost because we are forced into the rat race matrix to stay afloat..

Moral to The story, I don’t know if this country is salvageable without another civil war, we have been hijacked by the globalist and Corporations they control. The cards will be stacked against us more aggressively and will get worse before It can get better.

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The bills in the House and Senate would cap rental-home ownership at no more than 50 homes for many companies, requiring them to sell off any more they already own. A bill in Minnesota, meanwhile, would limit ownership to 20 homes.

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This does nothing. They'll just setup multiple LLC companies and carry on as they do now.

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There is a clear uptick in the homes being bought by institutional investors and it's growing.

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An uptick that would take like a hundred years to match the conspiratorial thoughts of many in this thread.

The US homeownership rate is remarkably stable over many decades, fluctuating from the low 60%s to as high as maybe 72% (2007 housing bubble). It's presently right in the middle of its long-term range. All of this nonsense about "you'll own nothing and like it" is just that - nonsense.

I'm curious to know what the board's hysterical response is to this:

Minneapolis - Avery Park

There's several of these going on around the country. Basically, major homebuilders are buying entire plats and then building out all of the units as single family to rent dwellings. Essentially, an entire neighborhood that is apartmentized houses.

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It’s market dependent and a lot higher in some areas. But yeah, I doubt they have a big or any presence across 99% of the geographical area of the US.

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The largest single owner in the US has 83K homes. Out of 82 million.

OUT OF 82 MILLION.

LINK

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are you suggesting institutional investors are helping Americans by forcing them to rent and saving money? That institutional investors are going to lose money long term by owning these homes?

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No. Institutional investors aren’t paying over a million dollars for a 425k home, a person with a 30 year mortgage will. Probably closer to 1.5 million with all the upkeep, remodels, taxes, insurance etc.

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I never have dug into that 9% number much to see how true it is but that is what I have seen reported.

I know in my line of work, we have what we call "zombie" houses that we have had in our inventory to manage for banks. Some we carry for years vs the 18 months or so that we typically cycle through.

I am also not sure how many of those are AirBNB/STRs but I am sure it's a large number.

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But in the case of "zombie" houses, wouldn't we WANT someone with actual money to come in and get them back into the mainstream inventory? On top of relieving the huge shortage of SFH we have, it would serve to improve neighborhoods plagued by such.

I honestly believe all of this is much ado about nothing. The Blackstones of the world are going to own some portfolios of homes. Who cares? Also, home ownership is not for everyone - and certainly not for everyone at ALL times of their lives.

The #1 way to get the middle class involved (as per your preference, which I agree with) is to address the shortage of dwelling units, presently estimated to be 3-4 million. Almost everything else is window dressing. Prices simply aren't going to go down materially with such limited supply.