This Is No Way to Gimme Shelter |
Americans today are justifiably angry about the price of rents and mortgages. Home prices have roughly tripled over the last 25 years, and the median home price is now $415,000.
The 30- and 40-somethings are having a tough time buying a first home. Young families may need to pay a whopping $75,000 on a down payment.
Democrats and some populist Republicans have convinced the Trump administration to pin the blame on institutional investors, including large banks, private equity firms, and hedge funds. The Trump administration is endorsing a proposal to prohibit these firms from buying homes and apartments.
This is a classic boogeyman solution that will make the housing shortage worse. The investment funds are an easy target, but they have never gobbled up more than a tiny percentage of the housing market. On average, less than 2.5 percent of homes are purchased by banks and speculative investors. How can that tiny market share be blamed for a near doubling in home prices?
The houses don't disappear when investors buy them. Investors often renovate and upgrade the fixer-upper........