(The Center Square) – Texas had the highest percentage of homes sold to institutional buyers in 2021, according to a new report by the National Association of Realtors – more than double the U.S. average.
Institutional buyers include companies and corporations that have deeper pockets than individual homebuyers or other households. Nationally, institutional buyers purchased 13% of homes; in Texas, they purchased 28%.
In Tarrant County, they bought 52% of homes; in Dallas County 43% of homes – a trend so alarming that Congressman Chip Roy, R-Texas, is calling for a federal investigation.
They also purchased nearly a third to nearly half in other North Texas counties of Johnson (48%), Rockwall (45%), Denton (39%) and Kaufman (38%). Farther south, in the largest Texas county of Harris, they purchased 39% of homes.
“I am against this. he said on Twitter on June 9, “We should have hearings.”
Companies and corporations purchasing homes continue as “home sales and rental markets continue to suffer from a huge undersupply of both for-sale and for-own units,” the report states. “As of March, the inventory of existing-homes on the market was equivalent to just two months of supply, well below the desired level of six months.”
Meanwhile, the median existing-home sales price continues to increase by 15% year-over-year. At the same time, asking rents on multifamily properties are up 11% year-over-year as of March. Rents on single-family properties are up 13% year-over-year as of February. This is up from 11.8% in 2020 and 5.8% in 2000, the report states.
The report also found that investors targeted areas with a high share of Black households, high-rental areas, where a greater number of millennials live and where housing prices have risen the most.
The report found that more than a quarter of U.S. counties (28%) had an institutional buyer share higher than the national average in 2021, with Lincoln County, Mississippi, having the largest share of institutional buyers at 67%.
Behind Texas, Georgia had the second greatest number of homes purchased by institutional investors at 19%, followed by Oklahoma’s and Alabama’s 18%, and Mississippi’s 17%.
The states with the lowest percentage of homes bought by institutional investors were Massachusetts and New Mexico (both at 7%), Maine (6%), New Hampshire (4%) and Alaska (2%).
Vermont was the only state where institutional investors didn’t purchase homes.
Texas also had the highest ratio of the median single-family home purchase price of institutional buyers to all buyers, the report found. Institutional investors paid an average 1.7 times more than individual homebuyers for median home prices.
By contrast, the national median sale price for institutional buyers was 26% lower than the state median price, the report found.