Landlords are taking over country’s housing market

As rising home prices, slow new home construction and demographic shifts push homeownership rates to 50-year lows, the U.S. is increasingly a country of renters-and landlords.

Last year, 37 percent of homes sold were acquired by buyers who didn’t live in them, according to tax-assessment data compiled by Attom Data Solutions and ClearCapital.com Inc.

That number may include second homes, or properties acquired by investors who seek to fix up old homes and resell them at a profit. But it’s a strong indication that landlords are playing a larger role in the U.S. housing market.

In the years following the foreclosure crisis, Wall Street drove a rise in the share of homes purchased by landlords, as private equity firms bought thousands of cheap homes. In 2012, institutional investors accounted for 7.8 percent of home sales, according to the report.

Rising home prices led big investors to curtail their purchases, and the share of homes acquired by institutional investors fell to 2.9 percent last year. But as Wall Street backed off, smaller investors picked up the slack, aided by tools developed to help big investors find, finance, and manage rental properties.

In Seattle, where the median home price was $414,000 at the end of last year, the annual share of sales to non-occupiers peaked in 2013, at 23 percent. But in cheaper Dallas, where the median home price was $201,000, the share of homes sold to people who don’t live in them nearly doubled in the last 12 years.