WASHINGTON — When President Donald Trump repeated his call for large, Wall Street investment firms to stop owning single-family homes, he spoke on a trend growing in Washington.
Redfin reports in Seattle that 25 years ago, less than 4% of the housing supply was owned by investors, increasing to 9% in 2020, and now reaching close to 12%.
The site AEI Housing Center breaks down ownership by the number of properties owned as well.
King County rental ownership by number of properties:
- 2-9: 86.6% (44,107)
- 10-99: 8.9% (4,529)
- 100-999: 1.9% (973)
- 1000+: 2.3% (1,320)
A larger share of homes in Pierce County are owned by larger firms.
Pierce County rental ownership by number of properties:
- 2-9: 78% (19,139)
- 10-99: 8.1% (1,987)
- 100-999: 2.5% (613)
- 1000+: 11.4% (2,805)
“Unfortunately, I don’t think the institutional investor ban is going to be the solution that solves that problem. I think it’s kind of peripheral to the main issue, which is a lack of housing supply, really. But I think it works well as a political talking point,” said Daryl Fairweather, the chief economist at Redfin.
Fairweather says that if prices were to be impacted, it would be felt in areas with a greater concentration of investor-owned homes.
Research from NYU estimates that for every 1% of homes owned by investment firms, housing prices increase 1.7%. The 10.6% AEI reports in Pierce County works out to an 18.02 percent increase, and the 10.5% it reports in King County works out to a 17.68% increase in housing prices.
President Trump has issued an executive order to rein in Wall Street ownership of those firms while asking the U.S. Congress to make the action into law on Tuesday night. The White House has yet to lay out guidelines for what meets the definition of “large firm.” Fairweather thinks whatever it is, restrictions would lead to other firms picking up the slack, instead of home buyers.
“I believe they would probably be replaced by smaller investors as opposed to first-time home buyers,” Fairweather said.
“If you could have a tax that applies to investors more broadly, I think that would go more towards balancing the scales than you could subsidize. First-time home buyers on the other side of the scale,” she continued.
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