Did Wall Street HELP the Housing Market?

Dave:
Hey, what’s going on everyone? Welcome to On The Market. I’m your host, Dave Meyer, and today we have an incredibly good show for you. I’m super excited for you all to listen to this. We have two economists from Moody’s Economics joining us, Tom LaSalvia and Ermengarde Jabir.
You might remember Tom, he was recently on the show, show number 81 with Lou Chen talking about affordable housing and rent and had a great conversation and wanted to have them back. And today we have these two experts from Moody’s joining us to talk about single-family rentals and the housing ecosystem. Basically, we talk about how the entrance of institutional investors like Invitation Homes or American Home 4 Rents have impacted the housing market in terms of affordability, available supply. And, yes, we really get into how it affects smaller investors like me and like you. Maybe you’re a big investor, I don’t know, but regular people investors too, non-institutional investors, how all this is impacting them. So it’s a fantastic conversation. I’m not going to waste any time. We’re just going to get right into it after the break.
Ermengarde Jabir and Tom LaSalvia, welcome to On The Market. Thanks for being here.

Ermengarde:
Thank you very much for inviting us.

Tom:
Yeah, a joy to be back.

Dave:
Yeah, thanks, Tom. Yeah, coming back. Thank you. We’ve had you twice in the last couple of weeks. It’s a pleasure. Well, Ermengarde, I understand you’ve been doing a lot of research into a topic we here at On The Market are very interested in, which is single-family rental space and how recent trends, mom-and-pop investors, institutional investors are playing out. So could you just start by giving us a high-level summary of the research that you’ve been doing?

Ermengarde:
Sure. So high level, we’ve been looking more specifically at the impact of institutional operators in the single-family rental market and more broadly on the housing ecosystem, particularly how it may or may not impact homeownership rates. And so definitely not to bury the lead, I will say that one of our main findings has been that while there is an impact on homeownership, when we measure it via econometric models, the impact is not significant.

Dave:
Interesting. Wow. Okay. Not what I was expecting and I do want to get into that, but can we back up a little bit and just talk about single families, the asset class as rentals. Has this always been a major spot for investors or how has the landscape changed over, let’s say, the last 10 or 20 years?

Ermengarde:
Practically speaking, single-family rentals have always existed in some form or another, but over the past decade in particular, we’ve seen a rise in the number of institutional owners in the single-family rental space. And so to really understand why this has been the case, we need to really delve into a little bit of economic history.
So about 10 years ago, 2011, 2012, which I realize we’re in 2023, so it’s slightly more than a decade now, the institutional single-family operators came into existence and really they arose from the situation left by the great financial crisis. Without the great financial crisis, it’s unlikely that institutional operators would have emerged in this space to the magnitude in which they did and the speed in which they did. Virtually overnight, they became the owners of tens of thousands of properties. And over the past decade, they’ve been net acquirers.
And so this brings us to the question, well, how were they able to do this? And essentially what happened was that we need to now go back even to the ’90s and really set the stage. So in the ’90s, there was a lot of bank deregulation in order for domestic US banks to be able to compete on the international field. And so what that led to essentially was a mix of retail banking and investment banking. And we were basically brought into the same bank under one roof. And that led to subprime lending, so deregulation in mortgage lending markets. So there were all of these subprime mortgages that were issued and banks were no longer holding the mortgages themselves, so they would sell them off to trusts essentially. And so this unknown trust that an individual homeowner couldn’t just call up and renegotiate a mortgage loan with, for example, if they were having trouble, was now the holder of the loan.
And so, of course, fast-forward to 2007, 2008, the great financial crisis hit. There was a massive leave of foreclosures. And so now these entities had not only the mortgages on their books, but they became the owners of real property and they are not in the business of owning and operating real estate. And so they sold off these properties wholesale essentially to the single-family rental operators at the institutional level that we’re now very familiar with. For example, Invitation Homes, which was originally funded by Blackstone and then spun off and became publicly traded, American Homes 4 Rent, which is now known as AMH and so forth.

Tom:
If I could interject for a moment, what’s fascinating about this is if you look at the markets where these publicly traded REITs are concentrated, it follows directly from Ermengarde’s story because it’s the markets that had the widest fluctuations, the largest bubbles, for lack of a better way to put it during that early 2000s period. And so if you really think about that economic history story, it’s these basically portfolio of houses that were foreclosed on that ended up going into these institutional buyers. This is fascinating, Dave. They did that because of the critical mass necessary to make the numbers work, to actually have a profitable competitive asset in relation to all of the other assets that are out there that could be purchased by investors. So this story is so intriguing because it’s not the entire country that’s dealing with this growth of institutional investment. And, again, it’s very much related to deregulation, it’s related to migration shifts, it’s related to the speed and cost of building in certain areas. So there’s a lot of depth here.

Dave:
Wow, that’s a super interesting story. So if I’m following it, there was deregulation in the ’90s that led to some different banking practices, one of them being subprime mortgages. We all know what happened there. And it wound up that banks basically were forced to repo… They were foreclosing on and winding up owning physical property, which they don’t want to operate. And so they sold them, I’m assuming, at a relatively cheap price to these large institutional investors, who then saw that it’s probably a pretty good business model for them. I’ll ask about that in a second, but I assume that since you said there have been net buyers since then, that it’s probably been a pretty profitable business model for them. I have heard in the past that some of this activity by institutional investors helped stabilize the housing market and contributed to the market finding a bottom. Is that true?

Ermengarde:
It is true. So in the immediate aftermath of the great financial crisis, so let’s go back and think about 2009, ’10, ’11, the households that owned their homes, or owner-occupier purposes, were in their homes, and the ones who were unfortunately foreclosed on were not able to reenter the market for homeownership at that time because of their foreclosure status. So essentially what happened was that a vacuum of sorts was created from the demand side and the institutional operators were able to step in and acquire the properties at deep discounts because they were making bulk portfolio purchases.

Tom:
But I’ll add to that and just kind of emphasize the point that it absolutely did create a bottom and it allowed banks instead of trying to sell property here, property there, property over there, at least all within the same metropolitan area and likely and oftentimes in the same even submarket, they were able to package them, right? So imagine the coordination that would’ve been incredibly problematic. These banks, they’re not real estate agents, they’re not interested in owning either. And so for them to actually enter the market with 500 homes in a particular metro, trying to sell them individually, there was no expertise there. So these REITs were there ready and willing and able to create that bottom and essentially create this entire new subclass of housing.

Dave:
And it’s interesting because now, I guess I’m fast-forwarding a little bit, but it seems like that model of localized efforts by institutional investors has persisted, right? You see all this information that certain zip codes are intensely impacted by institutional investors, while others are almost entirely neglected.

Ermengarde:
I wouldn’t say neglected. I would say that in order for their business model to work and be profitable, they really need to be quite concentrated, quite centralized. And so that gives them the advantage of being able to have perhaps one property manager for a large number of properties. It allows them to centralize things like maintenance, get bulk pricing on materials for home repairs and things like that. So it’s really capital expenditure reduction on their side.

Dave:
That makes sense. So I do want to get into what they’re doing now, but can you help fill in the last decade? We heard a great story about how it started, and I think there’s a lot of news and media about how institutional investors are impacting today’s market. But what have they been doing over the last 10 years?

Ermengarde:
Growing. They’ve definitely been acquiring more properties in their main metro areas. If we take just the three publicly traded REITs that operate in the US, so I mentioned earlier Invitation Homes, American Homes 4 Rent, and Tricon, which is based out of Canada, but they’re a large institutional operator here in the US. From 2016 until 2022, the number of properties that they own has grown by 55%, which is substantial. However, I go back to what I said initially because that seems quite alarmist and that number alone plays into the concern that so many people have, and rightfully so about the role of institutional ownership and the general housing ecosystem, how it may be crowding out individual buyers. But it’s important to note that homeownership over the past five years, 10 years, even 15 years, despite the drop in homeownership due to the great financial crisis and everything has still been north of 63%. And right now we stand at just under 66% homeownership rate.
So homeownership rate itself hasn’t been necessarily impacted by that alone, so by the growth in institutional ownership alone. There are a lot of other factors impacting individual buyer’s ability to get on the property ladder. Affordability obviously is one of them, the lack of new construction in single-family homes over the past decade, which has been the lowest ever. So the past decade has been the lowest ever. These are all factors that have played tremendously into the ability or lack of ability if people should be able to buy.

Tom:
Yeah, we completely understand the narrative that is out there right now regarding the institutional purchases and the affordability crisis that we’re ultimately in. And if you look at it from a timing perspective, it would follow. So as institutional purchases rise, we’re in this situation where in order to afford even a down payment, a traditional 20% down payment and closing cost on a median-priced house in this country, you need between $80, 000 and $100,000. That’s over a year of salary at the median household income level. That number back in 1980 was about half to two thirds of a yearly salary to get that down payment. So you see how that’s doubled in a sense in relation to income and wages.
And so there is this affordability issue. There’s definitely a housing shortage estimated to be between three and five million units with at least one and a half to two million of those being single family. Demographics are going to continue to push the need for single-family housing. Millennials definitely showed their desire to go out there and live the traditional US life as soon. As the pandemic took hold, that coincided with child-rearing, those millennials coming to age, and they did look for suburban or even exurban homes. And so that’s still a huge part of this story. So all of that though is pressurizing the entire housing ecosystem. It’s not necessarily that these “villains” of institutional buyers are the ones that are driving that affordability crisis.

Dave:
Yeah, that’s super helpful. I appreciate that context. Can you help us understand, just in absolute terms, how many homes do these institutional owners buy and what share of the supply of single-family homes does that make up?

Ermengarde:
So right now, between the three publicly traded rates that I mentioned earlier, it stands at about 160,000 homes total. They show a lot of sensitivity to market conditions, and I think this is a core factor that the wider public does not take into account. Single-family rental operators at the institutional level are not exclusively just buying up houses regardless of what’s happening in the economy, the macroeconomy very much affects their investment decisions. And so actually what we saw through 2022 is that in several quarters, their holdings actually decreased, albeit very slightly by 1,000 properties or less across all of them as a whole, but nonetheless, a slight decrease. And that’s because they’re constantly looking for value. They’re not only buying up houses for the sake of buying up houses, it needs to make sense to them from a business perspective.

Tom:
Yeah, and that actually is an incredibly important point here, and I don’t want to completely let them off the hook in terms of how they affect the market because I think one of the ways that they’re affecting now and that we’ll continue to see them affect it as we move forward, there’s going to be less and less value buys out there for owner-occupied, but also for mom-and-pop investors that have created a lot of household generational wealth from the purchase of single-family homes for rent. And that may be where more of the crowding ends up. We have to talk about build-to-rent communities versus buying existing stock.
But you could see how within these particular metros where there exists the critical mass already, if prices do start to fall, they have the capital, they have the ability to quickly go out and purchase those before other potential investors or households looking for owner occupied would get into that market. So it’s almost as if we go back to the start of our conversation where they created a bottom after the great financial crisis. Well, sometimes there’s investors out there that want that floor to be a little lower, right? And that’s allowed them to build wealth over time. And that could be going away in some of these markets.

Dave:
You’re saying that it might be going away because the institutional investors will jump in before prices fall too far?

Tom:
Before they fall too far. Ermengarde said it right, that they are value buyers, but again, given their capital, given their ability to purchase homes with cash, they have a lot of advantages in the market that will likely prevent some of those properties’ values falling enough to make it worth it for a first-time home buyer who’s willing to put in some sweat equity or an emerging mom-and-pop investor or one that wants to grow from being able to get their hands onto that property. So I think there is an effect, and I think it’s going to end up being a little bit more on that side of the investment, that side of, as Ermengarde said earlier, the housing ladder.

Dave:
For our audience, that is particularly interesting. Most of the people who listen to this show are mom-and-pop investors or emerging mom-and-pop investors. So definitely a critical point to listen to there. But, Ermengarde, you were about to say something.

Ermengarde:
Yes, to contextualize that small mom-and-pop investor market in the single-family rental universe, institutional operators only own, well, only is perhaps the wrong phrase, but they own an estimated three to 5% of all single-family rentals, which means that the remaining 95% essentially are owned by either mom-and-pop investors or by smaller regional players in the market.

Dave:
And given that housing prices are starting to come down in a lot of metro areas, what are these institutional buyers doing right now? Are they still buying or are they waiting to see what’s happening?

Ermengarde:
I would say that from the general housing ecosystem, what we’re seeing is that prices aren’t necessarily coming down per se. They’re correcting, and it’s very much a market by market situation and even a submarket by submarket situation where you still see quite tight supply in the single-family detached housing market where home buyers, particularly owner-occupiers, are paying premiums over the asking price because there really are so few properties or so few quality properties in a given area that they are still in pockets paying over ask because there’s competition.
So at the moment, single-family rental operators are taking a step back, they’re evaluating the market. Now that’s not to say that it’s going to last indefinitely or that the average potential owner-occupier, and by average, I don’t mean that in a bad way, certainly. I just mean a typical profile of an owner-occupier wouldn’t maybe have a little bit of a reprieve in the interim, but single-family rental operators certainly have been net acquirers across the board. Whether we look at the REITs or the private equity players, they’re all net acquirers and that’s unlikely to change.

Tom:
But, Ermengarde, what would you say to the question of their ability to get into new markets versus not the Phoenix and the Las Vegas and the Atlantas of the world because that’s where they’re already established. So it makes sense, I suppose, from an economic perspective, adding a marginal property here or there if they’re able to get one at that value. But what about entering into some of the other emerging maybe markets out there or markets that were some of the darlings of the pandemic period that maybe they hadn’t been in before? Sorry, Dave, I didn’t mean to steal your-

Dave:
No, please. That’s a great question. No, it’s a really good question. You’re doing my job for me. It’s making it easier. It’s great.

Ermengarde:
They’re quite unlikely to be able to break into new markets at the moment given the economic conditions. Now if there’s a drastic change and they’re able to make bulk purchases of portfolios in new markets, they’ll likely move into new markets in the event that that happens. But at the moment, given where we are with financing interest rates and the way they calculate their margins for profit in terms of the maintenance required for properties and given metros and everything, they’re very much unlikely to break into new markets. But as Tom mentioned, those boom-bust metros that suffered tremendously post GFC in terms of house prices, Phoenix, Atlanta, Las Vegas, they have been gold mines essentially for institutional operators because they were able to move into these markets quickly, get their operations up and running, and they were able to scale. That’s unlikely to be the case if they’re to move into any new markets at the moment.

Dave:
That makes a lot of sense. I do want to get back to the current day market, but you did say something earlier that I think would be helpful contextually, which is about construction of single-family homes. And I think you said that the last decade it’s been one of the lowest or lowest that it’s been historically. Can you just tell us a little bit more about the supply side situation with single-family residences?

Ermengarde:
And, again, it’s really a story about what happened pre GFC and post GFC. So pre GFC home builders were building, obviously supply was vast. People were buying homes who perhaps at that time couldn’t really afford to buy a home, but they were able to get a mortgage because of loosened lending practices. So when 2007 rolled around, there was a lot of product either under construction or sitting on the market ready to be sold to presumably an owner-occupier. And what happened was that builders got burned and therefore when we moved into the 2010s, from a building perspective, home builders were supplying far fewer units to the market. And on top of that, the units that have come to the market over the past decade, so by units I mean single-family detached properties, were not necessarily at an entry-level price point for the first-time home buyer to, again, get on the property ladder.

Tom:
I’ve got a great statistic for you guys here. Again, going back to the 1980s, not that everything was great then, as we know, but in terms of affordability, there was still a little bit more of that from a building perspective, about 40% of new single-family construction at that time period were homes less than 1400 square feet. That number in 2019 was 7%, only 7% of newly constructed homes were less than 1400 square feet with the vast majority of them being well over 2000. Think about how that impacts this shortage/affordability crisis. That’s a entire set of resources. If you build only 3000 square foot homes, well, that’s not exactly three 1000 square foot homes, but you get what I’m trying to say from a resource perspective, which are resources are becoming more and more scarce for building and our labor for building has become more and more scarce, which is pushing up the price of construction. And so now we’re left more and more with large expensive homes that exacerbate this problem.
So we go back to not trying to completely defend the institutional purchasers of single-family homes and what they’re doing, but there’s a lot under the covers of this affordability crisis problem. And it’s not necessarily the three to 5% of single-family rentals that are institutional buyers. Again, not trying to completely say, they’re certainly affecting the market in certain ways, and I think they will continue to, but it’s not the answer to that question. It’s a small piece of that puzzle.

Dave:
But, Tom, it’s so much easier to just blame Wall Street for everything.

Tom:
Of course.

Dave:
That’s a much easier way to do things. Yeah, I’m just kidding. That is very helpful to understand. So I do want to get back to sort of the original thing that we were talking about, which is the effect on prices and affordability that these institutional investors do have. And, Ermengarde, you said it’s small or non-existent. Can you tell us more about that?

Ermengarde:
So in the models that we’ve run, what we see is that the effect of the both institutional presence of single-family operators in a metro as well as the growth in the number of properties that they own in a metro, while they do negatively affect the homeownership rate, so the sign on the coefficient is negative, not to get too deep in the weeds of the econometrics, the statistical significance is not there. So it’s not statistically significantly impacting homeownership. And so I think that really speaks to what Tom was mentioning earlier about how institutional operators are impacting the market, but they are not the cause of affordability issues in the single-family housing market.

Tom:
Potentially very controversial thought on this, so I’ll play devil’s advocate in a sense. So I’m not sure this will play out, but I can even claim that this increase in institutional purchases has positive effects on the market. And I think that’s something that we’ve not addressed. We like to vilify, again, Wall Street and whomever, but I’ll give you a couple of reasons. One, having publicly traded REITs in the single-family rental market actually allows some very small players, very small investors who are interested in real estate to actually own a piece of the single-family market. I may not be able to afford my own home to rent out, but my 401(k), I can invest a little bit in these REITs. And so in some ways it democratizes a bit of housing. All right, so yes, I’m somewhat being a bit-

Dave:
No, it’s true. There is another angle to it.

Tom:
Right? That’s all I’m trying to do. I’m not trying to say it’s right or wrong or anything. I’m just trying to bring up the other angles out here that we should think through in terms of the social welfare implications of this emergence of another player on the market.
The other thing that may end up happening, and we’ve yet to really talk about build-to-rent communities. So, yes, build to rent is, for example, an entire set of 50 to 100 plus homes that are in a master plan type of community, potentially being owned by either one of these really massive players or some other large players within the industry, of course, given the capital intensity of what it would take to build all these homes at once in one area. And that may actually not crowd out the mom-and-pop investors because the mom-and-pop investors traditionally have been part of the existing stock of homes, purchasing the existing stock of homes, maybe fixing them up and renting them out. Or maybe it’s the home that was my entry-level home and then I went and I upgraded, but I didn’t have to sell my home. So now I rent it out and I’m start starting to build that real estate wealth little by little. That may still exist, again, particularly in these markets that don’t already have that major presence because of the critical NAS story that we continue to try to tell here.
So, all right, here’s me trying to be glass half full. Well, we have all this new capital that might be going into housing supply. What did we say before? We have a shortage of between three and five million housing units in this country. So does that capital that goes into it, especially if they’re built slightly smaller, maybe they’re not building McMansions out there, but maybe they’re building modest homes, not necessarily below 1400 square feet, but a little more modest. And maybe they end up being rented rather than purchased at least at the beginning of this process. But that doesn’t even necessarily mean that some of these build-to-rent communities might end up going into lease to own in the future or turn over many years from now. So I’m going to really be glass half full and play a little bit of devil’s advocate, but I think it’s important. What if this emergence of capital in the market increases housing supply in a strong enough way where it over time actually reduces the pressure on the market and the shortages on the housing market?

Dave:
That’s an interesting point. Your point is basically saying that anything that gets people to build more single-family homes could in the long run benefit affordability.

Tom:
Yeah, it might not be the perfect solution, it might not be the utopian solution out there, but it’s not bad to have more capital in the housing market right now.

Dave:
True, true. So can you both help me square something? I get and I follow the homeownership rates pretty closely because there’s this narrative that the US is becoming a “renter nation”, but it does not seem that the data suggests that. From my own research, it seems like it’s a fairly stable statistic between 60 and 70%. And, Ermengarde, you said it’s about 66% now. How does this make sense? There’s less supply, institutional investors are buying, they own, you said between three and 5% and there’s demand from homeowners, but how is the homeownership rate going up in this scenario?

Ermengarde:
So for that, we need to contextualize the numbers. So the ratio of homeowners to renters has more or less stayed the same, but if we look at the population of the US over the past 10 years, 15, 20 years, it’s grown. For example, the millennial generation is a huge generation on par with the size of the baby boomer generation. But of course, as we know, wealth is definitely skewed towards the baby boomers. I mean granted, they’re much older, but it’s still very much skewed. And there’s a narrative that, of course, it varies person to person, but on the whole was somewhat true of millennials not being able to buy their first homes as young as the baby boomers were able to buy their first homes. So the number of renters on a level basis has increased, but the share of owners to renters has remained somewhat stable.

Tom:
And I’ll say one more thing that adds to this is the boomers are aging in place, not necessarily going into senior housing or downsizing dramatically. And so you’re getting a situation where this house that maybe otherwise would’ve made it to market is sticking with that particular household, that generation, those boomers. And then one more step that I think why this narrative, this crisis is out there, those homes are either being passed down a generation to get somebody into that market, your children into that market without having to worry about the down payment situation, or that house is being sold at a premium and that money is then being used for only a certain income class of generational wealth that is able to get into that home.
So I think the narrative comes, again, down to the fact we’re not building smaller entry-level homes and the homes that are going to millennials are ones that often were owned by someone else in that family. It’s not necessarily we have this nobility and futile-like system out there, but I think if we do not address the single-family issues, that’s going to become more and more prevalent. And I think that’s the fear. I think the narrative here is because there is rational fear of what’s happening with the markets and what’s happening with that American dream. So again, we don’t want to say everything’s rosy because it’s not, but it’s not necessarily the institutional investors that are doing that.

Dave:
That’s super helpful. My last question, you’ve addressed at points along the way, but before we get out of here, I’d love to know is there any other considerations that you think our audience should know for their own investing and homeownership decisions, considering that this is mostly mom-and-pop investors, real estate agents, lenders, do you think anything else they should know about how institutional investors are impacting this market and how this might impact them?

Ermengarde:
So as Tom mentioned earlier, the concern overcrowding out is not irrational. It’s just that single-family rental operators at the institutional level are not necessarily the cause of the crowding out of individual home buyers. But when we look at them in comparison to small mom-and-pop operators, that’s likely where we’re going to see initial crowding out. So institutional operators will likely start their massive crowding out effect, if you could say that that might happen in the future, by eating up some of the share of single-family rentals owned by mom-and-pop investors, especially because it’s quite easy for them to deal with other investors even if they’re quite small scale from an acquisition perspective because presumably everybody’s looking at their bottom line versus owner-occupiers who potentially have a much more emotional attachment to properties, are willing to pay premiums and so forth. And because, from the investor perspective, whether you’re small or large, everybody’s out there looking for value, looking for a good return on investment. And so likely the crowding out effect will start with the mom-and-pop investors.

Tom:
And I’ll be slightly more positive or optimistic for mom and pop or at least mention that there’s still going to be opportunities out there. I think there’ll be a lot of opportunities in smaller markets in other emerging metros where there’s population gains because again, it’s going to require not a complete crash maybe, but it would require a lot of homes going on to the market at once in these communities where there isn’t already an established player where invitation homes or some of the others aren’t there already.
One way I could see that happening is if they start with build to rent and then little by little they add to the margin of an existing stock because then they could create that criticalness that way. So I’d look out for that. If you see a new build-to-rent community that is owned or will be owned by one of these large players, then that could actually be a sign that some of the existing stock may end up going over to those types of buyers or there’s going to be more competition for those in time. But if you don’t have that happening in your particular market, then the traditional competitive forces are there and I think you’re still going to have opportunities.

Ermengarde:
And at the end of the day, it becomes a tale of two metros. So the metros that have the heavy institutional presence and the ones who don’t and are unlikely to gain that presence. So to leave it also on a positive note, as Tom mentioned, small mom-and-pop investors can really look to those areas rather than the metros where institutional players are heavily invested already.

Dave:
All right, well, love leaving it on a positive note. Thank you both. This has been super helpful. I loved this conversation. It really has been eye-opening. If people want to learn more about your research or either of you, where can they do that?

Ermengarde:
They can go to cre.moodysanalytics.com.

Tom:
Yes, they can. And particularly on that page, you’ll see a link to all of our insights. We put out between two and three different reports each week and many of them being publicly available. And the other way, reach out to us, our emails… And, Dave, I don’t know if you’d be able to share those, but mine’s [email protected] And, Ermengarde?

Ermengarde:
Mine’s [email protected]

Dave:
All right, great. Well, we’ll put those in the show notes if you guys, anyone listening wants to link to those. Thank you both so much for being here. We really appreciate your time and hopefully we’ll have you back again soon to talk about another fascinating topic that you all are researching over at Moody’s.

Tom:
Thank you, pleasure being here.

Dave:
Another big thank you to Tom LaSalvia and Ermengarde Jabir for joining us from Moody’s Analytics. I hope you all enjoyed that show. I thought it was fantastic. I want to blame institutional investors for things just like I think everyone else does, because they seem like an easy scapegoat. But it is really helpful and important to understand the nuance of what is going on and I learned a ton from this conversation that even though these big players are in the market and they’re likely to stay in the market that we are in, they haven’t really had a big impact on affordability.
Instead, things like the lack of supply and low interest rates are really contributing to that in addition to demographics in a way that is larger than the activity of institutional investors. But as we’ve talked about a few other times on the show, it really is market dependent. So if you live and operate in a city like Atlanta or Charlotte or Las Vegas where these institutional investors do have a large presence, you probably are feeling it more than what we’re talking about in this episode, which is sort of on this national aggregate level.
I hope this has been really helpful to you. I learned a lot and I think there’s some key nuggets here that I will personally take away for my investing decisions. Hopefully the same for you. Thank you all for listening. If you have any feedback on this show or about this episode or on the market, any ideas for us in general, hit us up. We love hearing from you, hearing what episodes you like, which ones you don’t, and what you think we could do better. You can find me either on BiggerPockets or on Instagram where I’m at The Data Deli. That’s the best place to send feedback. Thanks again for listening. We’ll see you next time for On The Market.
On The Market is created by me, Dave Meyer and Caitlin Bennett, produced by Caitlin Bennett, editing by Joel Esparza and Onyx Media, researched by Puja Gendal, and a big thanks to the entire BiggerPockets team. The content on the show, On The Market, are opinions only. All listeners should independently verify data points, opinions, and investment strategies.