The Reason Homes Feel Like They Cost So Much (Its Not What You Think)

Scroll through your feed and youll see plenty of finger-pointing about why homes cost so much. And according to a national survey, a lot of people believe big investors are to blame.

Even though data shows thats not true, nearly half of Americans surveyed (48%) think investors are the top reason housing feels so expensive (see graph below):

But that theory doesnt actually hold up once you look at the data.

The Truth About Investors

Investors do play a role in the housing market, especially in certain areas. But theyre not buying up all the homes like so many people on social media say.

Nationwide, Realtor.com found only 2.8% of all home purchases last year were made by big investors (who own more than 50 properties). That means roughly 97% of homes were bought and sold by regular people, not corporate giants. Danielle Hale, Chief Economist at Realtor.com, explains:

Investors do own significant shares of the housing stock in some neighborhoods, but nationwide, the share of investor-owned housing is not a major concern.

So, if its not investors, why are home prices so high?

Whats Really Behind Todays Home Prices

The real story behind rising prices has less to do with whos buying and more to do with whats missing: enough homes. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), says:

"It's been popular among some to blame investors, but with housing, the economics of that don't make a lot of sense. The fundamental driver of housing costs is the shortage itselfit's driven by the fact that there's a mismatch between the number of households and the actual size of the housing stock."

There simply havent been enough homes for sale to meet buyer demand. And that shortage, not investor activity, is whats pushed prices higher just about everywhere.

Bottom Line

Its easy to believe investors caused todays housing challenges. But the truth is, the market just needs more homes, and thats finally starting to happen.

As more options hit the market, buying may feel a little more realistic again.

Connect with a local real estate agent and talk about whats happening in your market.