If you scroll through social media, you’ll see plenty of opinions blaming investors and big corporations for rising home prices. According to recent national surveys, nearly half of Americans believe large investors are driving the affordability crisis. It’s a theory that sounds convincing online, but the data tells a different story.
Are Investors Really Buying All the Homes?
Investors certainly exist in the housing market, and some neighborhoods see more activity than others. But they’re not buying up the majority of available homes. Realtor.com reports that only 2.8% of all home purchases last year were made by large investors who own 50 or more properties. That means over 97% of homes were bought and sold by everyday people — not corporate investors.
As Danielle Hale, Chief Economist at Realtor.com, explains, investor-owned housing nationwide isn’t a major concern.
So if it’s not big investors causing high prices, what is driving home values up?
The Real Issue: A National Housing Shortage
The most powerful force pushing home prices higher is simple economics — there are more buyers than homes available. For over a decade, new home construction has lagged behind population growth. At the same time, many current homeowners have stayed put longer due to low mortgage rates and lack of options. This creates a limited supply of homes, making competition fierce.
Robert Dietz, Chief Economist at the National Association of Home Builders, states it clearly: the fundamental driver of housing costs is the shortage of available homes, not investor activity.
Low Supply + High Demand = Higher Prices
When there aren’t enough homes to meet demand:
Buyers compete for fewer options
Bidding wars become more common
Prices rise faster
This pattern has repeated across the country, especially in desirable communities with lifestyle amenities, schools, open space, and convenience.
Is Relief on the Way?
The good news is that builders are starting to add more inventory to the market. As more homes are listed, buyers should feel less pressure, and prices can begin to balance out. More inventory means:
More negotiating room
More variety
A healthier housing market overall
Bottom Line
It’s easy to assume investors are causing today’s affordability challenges, but numbers show the real issue is a shortage of homes. As inventory improves, homebuying may feel more realistic again.
If you’re planning to buy or sell, connect with a knowledgeable local real estate professional who understands your market’s trends, supply levels, and strategies for success. Guidance matters more than ever in today’s shifting landscape.
Looking for help navigating the San Diego County market? We’re here to answer questions, offer local insight, and help you transition into your next home smoothly with white glove, 5-star service.
Ready to explore your options? Let’s talk.