Corporate real estate owners definitely played a role in some of the rental increases we saw over the last 3-4 years, particularly big cities like Atlanta, etc. Mega investors, who owned 1,000 or more properties, accounted for about 3% of the homes in the United State up to June 2022, post COVID. Within the first two years of the pandemic, these investors bought up hundreds of thousands of single-family homes. Doing so, many Buyers in the lower price points were not able to out bid these investors for properties. These investors were paying cash, no appraisal, little to no due diligence, extremely short closing periods and relatively seamless transactions. These investors would then rent these properties to tenants. This left first time homebuyers and cash-strapped homebuyers without a way to compete with these investors. In turn, these investors raised the rental rate in many of these areas they were buying properties across America. Of course they were not the sole factor of the inflationary rental rates, but they definitely played a part just like many of the typical small landlords across the United States and they other factors COVID brought on.
Investors are still purchasing a number of US homes, however, purchases June 2024 fell to 80,000 units, according to CoreLogic. That represents a drop of almost 50% from a peak of 149,000 in June 2021, reflecting a return to pre-pandemic levels.
