Is Grant Cardone right that the US will become a renter nation?

Question

According to Pew, "investors bought 24% of all single-family houses sold nationwide last year, up from 15% to 16% annually going back to 2012, according to a Stateline analysis of data provided by CoreLogic, a California-based data analytics firm. That share dipped only slightly in the first five months of 2022 to 22%."

If the percentage of homes purchased continues to shift to investors, is this really good for communities?

Chris Seveney · Answer

@Amy Raye Rogers

1. It will not be good for communities as it will lead to signficantly greater volatility in pricing. If you don’t believe this then look what is going on in areas with high ibuyer acquisitions.

2. The amount of $ thrown into economy has been ridiculous and very easy for investors to get loans - let’s see what happens now that banks have tightened lending, home prices start to fall and rents finally go stagnant.

It’s a cycle and we will eventually revert back down.

Nicholas L. · Answer

@Amy Raye Rogers

The homeownership rate has been rebounding since the great recession, so I just don't think it's true that we're becoming a nation of renters.  A house purchased by investors as a flip is put back on the market as a residence for someone to buy, so the percentage purchased by investors can go up while still allowing more people to own.

Eliott Elias · Answer

I believe so, most investors want to make a profit, how do they do it? They put a lot of money into the property and improve the asset, most homeowners won't to the level up repair a investor will

Tommy Parker · Answer

I do think that there are more renters because of how the market panned out.

Steven Gesis · Answer

I dont think Grant Cardone is right, but I think the trend is towards a rental society and that we should expect that the future will have more renters than owner occupant

Nathan Grabau · Answer

We broadly have a housing shortage in the US, this is total units that can be lived in. The only way to increase this number of units is for the price or demand broadly to go up. Landlords buying homes, that they will use as rentals does this. Housing inventory needs to increase for prices to stabilize, and right now we need to take an all of the above strategy to get more SFH built.

Manco Snead · Answer

I think there is some selective twisting of what is really going on here. Stating the obvious: home prices/rates are currently very high=many people cannot afford to buy, so they are forced to rent at prices which are also very high, which slows their saving ability putting them even further from ever buying. Many non-investor home buyers buy fixers; this is what allows them affordability. If it's been flipped it may now be out of their price range.

Is this good for communities? A community consists of people and now more people will be renting. Would any of us enjoy renting while thinking all the while we may never be able to buy? Of course this isn't good for communities.

Jeremy Horton · Answer

What makes you believe this?

I get it with the flips - ok. But as far as most LTR, they are moderately renovated to renter quality and then rented out long term. Repairs are generally going to be minimized. I find MOST houses that are in a decent area are maintained and improved VASTLY MORE than MOST rentals in the same area. Most rentals are just maintained to some extent then repaired before the damage becomes very bad

Jeremy Horton · Answer

Gonna have to disagree here

Rentals (1) destabilize the neighborhood and area - homeownership does the opposite (2) It's not so much creating value right now - it's more a supply demand thing... if they can't afford to buy or can't find a place to buy then they will rent. I have a couple houses in one neighborhood; they are rented because people want to live in that area but there are no houses for sale. The value I created was really for myself - I know they would prefer to own as MOST families would.

Manco Snead · Answer

@Nathan Grabau

"Increased rental competition and letting people who want to rent have better access to SFH is really positive for our economy and society."

I'm not following your statement, can you elaborate?

Is Grant Cardone right that the US will become a renter nation?

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