When you scroll through your feed, you'll notice a lot of blame being passed around for why homes are so expensive. In fact, a national survey shows many people think big investors are the main reason behind the high prices.

Despite what the data actually shows, almost half of Americans surveyed—48%—believe that investors are the main reason housing feels so expensive (see graph below).

That idea doesn’t really check out when you take a closer look at the data.

 The Truth About Investors

Investors definitely have a presence in the housing market, particularly in some neighborhoods. However, they’re not snapping up every single home, despite what a lot of social media posts might suggest.

According to Realtor.com, only about 2.8% of home purchases last year were made by big investors who own more than 50 properties. In other words, nearly 97% of homes were bought and sold by everyday people, not large corporations. Danielle Hale, Chief Economist at Realtor.com, shares more insight on this trend.

““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.”
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— Realtor.com

If it’s not investors driving up prices, then what’s behind these high home prices?

What’s Really Behind Today’s Home Prices

The real reason prices are going up isn’t so much about who’s buying, but more about the fact that there just aren’t enough homes available. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), points this out clearly.

““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 itself—it’s driven by the fact that there’s a mismatch between the number of households and the actual size of the housing stock.”
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— Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB)

There just haven’t been enough homes on the market to keep up with how many buyers are looking. That lack of supply—not investor purchases—is what’s driven prices up almost everywhere.

Bottom Line

Many people think investors are to blame for the housing crunch we’re facing. The real issue, though, is that there just aren’t enough homes available—and the good news is, that’s beginning to change.

With more choices coming onto the market, buying a home might start to feel a bit more doable again.

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