Countless news headlines have been calling for a housing crash for the better part of a year, yet prices are still climbing in many parts of the U.S. According to data from Redfin, the median sale price has increased by over 9.38% since January and has fallen only 3.4% from the peak in May 2022.
Despite rising mortgage rates, buyers are finding little relief in home prices because of the massive shortage of supply. According to an analysis from Realtor.com, the gap between single-family home construction and household formations grew to 6.5 million homes in 2022.
Shortly before home prices began to surge in 2021, Amazon.com Inc. Founder Jeff Bezos made a bet on a Seattle-based startup that had a mission to make real estate investments more accessible to retail investors. That year, Arrived Homes became the first company to legally sell shares of individual rental properties to nonaccredited investors.
Investors on the real estate platform have now funded over 275 single-family homes with a total value of more than $102 million.
Bezos’s investment in the real estate company’s seed round appears to have been well-timed since skyrocketing home prices followed by rising mortgage rates have helped send the homeownership rate in the U.S. to its lowest level since 1970.
The billionaire tech entrepreneur isn’t the only one betting on the U.S. becoming a nation of renters. Last November, JPMorgan Chase & Co. announced its joint venture to acquire and develop $1 billion worth of single-family rental communities. MetLife Investment Management estimated that institutions owned some 700,000 single-family rentals in 2022 and expects that number to reach 7.6 million homes by 2030.
While some people blame investors like Bezos for contributing to the housing shortage, others see fractional ownership through platforms like Arrived as their only option to invest in real estate in today’s market.
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This article Bezos-Backed Company Surpasses $100M In Single-Family Home Acquisitions While U.S. Housing Shortage Worsens originally appeared on Benzinga.com
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