Wall Street isn’t to blame for the chaotic housing market
Housing prices have yanked the dream of homeownership out of the desperate, clutching hands of millions. Countless tenants don’t even have that dream, chafing under the increasing rent burdens they are forced to bear. And to top it all off, the rich just keep getting richer: The stock market is booming, homeowners have accumulated more than $1.5 trillion in equity since the Covid-19 recession began, and personal savings are up for most higher-income households.
Some people are furious over reports that institutional investors (often private equity firms) are increasing the demand for homes and pushing prices upward. The Wall Street Journal wrote earlier this year that “yield-chasing investors are snapping up single-family houses” and “competing with ordinary Americans.” Marketplace reported the same, noting one buyer had been outbid six times by all-cash offers. Inman writes that consumers are “increasingly competing against institutional investors.” And the Real Deal goes further, claiming that one of the “main reasons for the skyrocketing prices are actually a huge buying spree from institutional investors.”
A recent Twitter thread blaming BlackRock, the world’s largest asset manager, for buying “every single family house they can find ... and outbidding normal home buyers” went viral, prompting even J.D. Vance, the Hillbilly Elegy author making a play for an Ohio US Senate seat, to accuse “The Left” of ignoring the situation because of BlackRock’s corporate diversity initiatives.
