If you were to believe everything that you see on social media you would think Blackrock has bought all of the houses in the US. Or at least most of the houses that have sold in the last few years. The truth is that Blackrock has not bought one house. They do not buy houses but there is a similar fund that does buy houses by the name of Blackstone. These are not the same funds nor are they controlled by the same people. While many people feel funds like Blackstone are buying all the houses that is not true either. So what is true?
What is the difference between Blackrock and Blackstone?
Blackrock is the largest asset management fund in the world with over 9 trillion dollars under management. Blackrock has had ties to the US government and has enormous power and wealth. Many people assume Blackrock is who buys houses because their name is so close to Blackstone.
Blackstone is a private equity firm that has 880 billion under management. Blackstone owns companies that buy and rent houses in the United States and other countries as well. They also own companies that buy and rent apartment buildings and commercial real estate as well. Blackstone also directly owns real estate.
These are not the same fund and it is important to make the difference because some will say the US government is helping fund corporate ownership of housing because of their ties to Blackrock. when that is not true at all.
Why are housing prices increasing?
Does BlackRock invest in companies that own housing?
While it is true that Blackrock does not own houses or own companies that own houses, they do invest in companies that own houses. Blackrock owns 6.7% of American Homes for Rent, which owns 59,000 homes in the United States. Blackrock shares in the company represent $872,000,000 which may seem like a lot of money but that does not even come close to the top 50 investments Blackrock has. Their number one holding is Apple with more than $176 billion in value and their 50th top holding is Wells Fargo with over $11 billion.
Many people claim Blackrock buys houses because they own some of American Homes for rent but to make that claim you also need to say they build phones, are a bank, and pretty much do everything because they invest in almost every industry.
Why are the corporate housing stats deceiving?
I am seeing more Facebook posts and articles about Blackstone wrecking the housing market because they are buying single-family homes. There are so many bad articles about corporate ownership of housing with bad data that it blows my mind. One article from CNBC claimed there 40% of housing would be owned by corporations by 2030 which is a crazy statement since less than 1 percent is owned by corporations now.
They got this stat from Yardi who claimed:
“Management estimated in a recent research paper that institutions own
some 700,000 single-family rentals in 2022, about 5% of the 14 million
SFRs nationally. MIM forecasts that by 2030, institutions will increase SFR
holdings to 7.6 million homes, more than 40% of all SFRs.”
I reached out to MetLife and they confirmed there was never any research paper published with this data. They did confirm their people had lunch with Yardi people and mentioned some of these estimates over lunch. I asked Yardi for a link or any data to back up these stats and they refused and called me a liar.
There are plenty of papers and stats that show from 300,000 to 500,000 homes are owned by large corporations. When you hear that 28% of homes are bought by corporations those stats include all corporations, the majority of which are mom and pops.
How many properties are hedge funds buying?
Is Blackstone wrecking the real estate market?
The truth is corporations and hedge funds own less than one percent of the 89 million single-family homes. Their share of single-family rentals is going up because more mom and pops are selling than buying. There are 14 million single-family rentals now while there were 15.2 million in 2016. In that same period, owner-occupied single-family homes have increased by more than 10 million. The reason rents are going up is that there are too few rentals not because funds are buying all the houses. Some funds are even building right now which we desperately need.
These big funds are the only ones buying houses to rent and I don’t think families or people who can’t buy should be limited to living in apartments. The video below goes into even more detail talking about bills introduced to stip corporate buyers.