Institutional investors and housing supply

Critics have blamed institutional investors for contributing to the housing affordability problem by buying up single-family homes and reducing the supply of homes for sale. However, this concern is largely misplaced. While institutional investors do reduce the supply of owner-occupied homes, they simultaneously increase the supply of rental homes. This allows financially constrained individuals to move into neighborhoods with more amenities and previously limited rental options. Institutional investors also play a role in stabilizing distressed housing markets. By purchasing homes in free fall and making efficient repairs, they fill a void and serve a valuable purpose in this aspect.