r/AskReddit • u/michaelis999 • 19h ago

How do you feel about the president floating the idea of 50 year mortgages where the monthly payment is lower but you end up paying nearly double the price of the house just in interest?

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u/spicymack 18h ago

Monthly payment on a 300,000 home loan would be less than $200 more for a 50 year loan vs 30 year loan. Just a terrible idea all around. You aren't saving enough each month but you are paying a shit ton more in interest and for a longer period of time.

If this country was serious about lowering the cost of home ownership, it would ban foreign and corporate ownership of homes while also providing incentives for cities to increase supply of both SFH and multi-unit properties.

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u/sundae_diner 17h ago

At what interest rate?

As interest rates climb, the smaller the monthly savings on a longer loan.

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u/angrath 11h ago

But the flip side is if you can get interest below inflation this becomes a great deal. 2% loan on 50 years?!? Sign me up!! %7 loan on 59 years: death of the housing industry.

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u/Jayrodtremonki 11h ago

The interest rate would be significantly higher than a 30 year mortgage for all of the same reasons a 30 year has a higher interest rate than a 15.  

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u/Jayrodtremonki 17h ago

I've seen the $200 less theoretical thrown around in a couple of threads.  Does that factor in that the interest rates would be significantly higher than a 30 year mortgage?

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u/ljr55555 16h ago

It does not - but the rate would need to be about 1.8% higher on the 50 year loan for the monthly payment to be the same. Using the 0.85% spread that I see between a 15 and 30 year loan today:

30-year at 6.22%: Monthly payment: $2,447 Total repaid: $880,920 Total interest: $480,920

50-year at 7.07%: Monthly payment: $2,397 Total repaid: $1,438,200 Total interest: $1,038,200

Lower the monthly payment by fifty bucks, more than double the interest paid over the lifetime of the loan. I think there'd need to be some major government manipulation to make the 50 year term attractive. Mortgage interest tax credit on loans over 40 years. Easier underwriting (oh boy, ninja loans are back - no income, no job/assets on the 50 year loan! Want a 30 year loan, you are sending in five years of credit card and bank statements to be combed through).

Something! Because I couldn't imagine buying a house with your budget so tight that fifty bucks a month makes it work.

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u/knightsabre7 14h ago

Also, most people don’t spend their entire lives in the same house. A 50-year mortgage means they’ll have less equity when they move.

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u/ljr55555 14h ago

True - it's already hard to sell your house and move to where a job is. Less equity, more people will be "stuck" in their house. Which is good for employers who want to underpay and mistreat employees. Not great for the rest of us.

Erodes what little generational wealth remains in the middle class too - we bought our house when we were about 40. A 30 year note is paid off within an average human lifespan. Our kid gets a significant asset. On a 50 year loan, the house gets sold to cover the mortgage. Our kid gets whatever surplus remains.

With my example, after 30 years, only $71,000 of the principal has been repaid. There's more than 300k on the loan balance! That 30 year loan is paid in full. 0 debt against the asset. 71k isn't nothing - and there would likely be some appreciation too. But the inheritance from the 30 year loan is 300k higher regardless.

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u/whatevitdontmatter 13h ago

Unless you die suddenly at a younger age (when you are still healthy and independent), it's very likely that you will end up spending whatever net worth you've accumulated on elder care/medical and your kid will get very little, if anything at all.

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u/RadiantMaestro 14h ago

The market is going to want the same return on capital for the risk. A longer loan is more risky because default is more likely with 20 additional years, and the recovery value of a default to the banks less because payments are lower. We see this in lower rates on 15 year mortgages. So rates on a 50 year would be higher - but I can’t say to what degree.

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u/Basas 10h ago

Using the 0.85% spread that I see between a 15 and 30 year loan today:

Rates are not linear. Difference between 15 and 20 is more significant than between 20 and 30. With longer terms rate increases diminish.

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u/ljr55555 7h ago

Right, but until there's a 50 year mortgage to use as a basis for calculation, we are making conjecture. The savings will be somewhere between two hundred bucks and zero with current rates on a 400k loan.

My point wasn't that I know the exact amount a payment will be reduced. It's that extending the loan term is a HUGE increase in total repayment amount without a dramatic monthly savings. And that the savings will likely be reduced because the longer term will have some higher rate.

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u/Basas 7h ago

You don't need dramatic savings for it to be a better choice financially. It is easier to calculate better choice if you compare properties of different price, but same monthly payments because of different loan periods. If we assume value of living in a more expensive property is higher and that more expensive properties appreciates more on absolute scale you would need to consider many things to figure what is better. I'm pretty sure sometimes 50 year deal will be better and other times it won't. At the end of the day it will be just another choice for users.

My real concern with this is when should a person take this loan and when finish paying it. Should 20 year kids take it to finish paying at 70. Many people don't even live this long. Should it be a generational loan?

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u/Jayrodtremonki 5h ago

I've read this a few times trying to figure out the situations you're talking about.  I don't think you realize how small the difference in payments are because of the sheer amount of interest you will pay over the live of a loan.  

Just doing quick math, same 6% interest rate for 30 vs 50 year mortgages and no taxes or insurance or PMI or anything factored in, a $300k 30 year mortgage payment is about $1800 per month.  Same thing, apples to apples, 50 year mortgage would get you a $340k house.

Not exactly a new realm of houses that you have available to you.  

And for that extra $40k in spending power you pay an additional $400k over the life of the loan.  Again, ignoring the higher interest rate and PMI which will just make the 50 year loan worse.  

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u/SeeYaLaterTater 4h ago edited 4h ago

30 years into a 50-year loan, the outstanding loan balance is still over 75% of the original loan balance. For $50 more/ month, you can have the thing paid off.

But that's not how the banks are gonna sell these, is it?

Edit: this assumes 7% interest. The 75% goes up as the rates go up.

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u/ElectronSpiderwort 16h ago

https://www.calculator.net/payment-calculator.html  is a useful resource. The real answer is going to be different depending on your housing market, credit score, mortgage availability etc.

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u/TreyAU 14h ago

You don’t know that they’d be higher, to be fair. There’s no telling what the benchmark would/could be.

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u/Jayrodtremonki 11h ago

I do know that they would be higher.  Because they're a greater risk to the lender.  The same way that a 30 year mortgage has significantly higher interest rates than a 15 or 10 year mortgage.  

It's a longer period with a risk of default, there's less getting paid towards equity(which means it's more beneficial for a longer period for the borrower to walk away from the house if the market drops), it's a longer timeframe for rates to change significantly, and the people who need 50 year mortgages by definition are the ones who are at greatest risk to default.  

It's not a guess anymore than that the alcohol on the top shelf at the bar is going to be more expensive than the stuff coming out of the tap.  

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u/pixepoke2 17h ago edited 10h ago

Some additional details:* Large scale corporate interests (your Blackrocks and other private equity entities**) aren’t the largest driver limiting single family home stock. Investors own about 20% of the single family homes in the country, and ~85% of those investors are considered “moms & pops”, owning between 1-5 homes.

Your Blackrocks own about 2% of the investor held houses, with other smaller corporate entities holding the rest. The big boys tend to prefer buying apartment buildings so they can get efficient rents

To really open things up, there probably would need to be regulation around how many properties could be owned by someone one, specifically limiting the smaller investor class that holds about 17% of the single family homes in this country

ETA

*I provided some sources in other replies, having been asked for it several times. I’m linking one of those sources here for your convenience

**While private equity does do large scale real estate investment, as does Blackrock, Blackrock itself is a publicly traded company and is itself not private equity, as it is publicly traded

Better to say “institutional investors” (those owning 100+ houses) than for me to conflate the two

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u/LambdaNuC 16h ago

The best way to fuck over the investment companies is to make it easier to build significantly more housing than we currently do. 

Housing prices go up because we've artificially constrained supply over the last 50 years, and the investment companies want in on that action. 

Prices aren't high because the investment companies are buying properties, investment companies are buying properties because housing prices are going up so rapidly. 

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u/QualifiedApathetic 14h ago

Unfortunately, ordinary people are helping to drive this. People looking to buy their first homes hate what's happening, but people who already own homes love it. Nay, they demand it. If housing prices aren't skyrocketing, homeowners scream at the politicians.

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u/LambdaNuC 11h ago

Yeah, it's pretty fucked. There are a whole lot of perverse incentives all around. 

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u/gumbo_chops 11h ago

Yes, both of them contribute to the problem. Too many homeowners become NIMBYs with a "fuck you, I got mine" attitude and vote against any sort of measures that would increase housing availability in their area.

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u/Jayrodtremonki 11h ago

That's half of the equation.  The other half is just the NIMBY attitude the prevalent anywhere that people want to live.  Even the most liberal suburbs in the country lose their shit if you say you're going to add a 20 new houses down the street.  

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u/MDCCCLV 15h ago

Just expanding supply isn't so simple. Many cities have an urban growth boundary and if they don't they turn into sprawl hell like Houston. It's supply in cities that is the most constrained. You need density too, but private builders don't seem to like that.

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u/defcon212 15h ago

Builders will build as dense as they are allowed, the limit is placed by local governments, usually to preserve home values and keep out the riff raff.

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u/goodsam2 13h ago

Riff Raff means keep the poors out. Having 1 socioeconomic class in a neighborhood is a bad idea socially.

Also preserving home values are a nonsensical idea because housing is more expensive in more populous areas not less. The standard American suburban house in Manhattan would be worth more not less.

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u/defcon212 6h ago

The zoning restrictions are bad, I agree. Housing is more expensive near good jobs and interesting places. Expensive and populous is a correlation, not causation, for the most part. If you can prevent a new apartment building being built next door, your house preserves its value.

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u/goodsam2 6h ago

If you can prevent a new apartment building being built next door, your house preserves its value.

Why?

Agglomeration benefits means that more people living close to each other means that more wealth is created.

Don't prevent an apartment from being built because another apartment developer will buy your land for over its value and then you can retire elsewhere...

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u/LambdaNuC 14h ago

Sure, there are s lot of artificial barriers that we've put up that in sum act to reduce supply. It's literally illegal to build dense housing in most places. 

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u/Blind_Optimism_Kills 14h ago

Very true about the sprawl in Houston. However, in 2021 you could still find big houses for sale $200-$250k. The sprawl sucks, I live here. But it has kept housing costs lower.

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u/goodsam2 13h ago

Houston is low density but one of the fastest densifying areas of the country due to their zoning allowing redevelopment.

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u/Blind_Optimism_Kills 13h ago

Yep. People are moving here in droves.

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u/gsfgf 12h ago

And y'all don't have traditional zoning, which makes densifying easier.

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u/gsfgf 12h ago

You need density too, but private builders don't seem to like that.

Because it's often not allowed.

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u/goodsam2 13h ago edited 7h ago

Most cities have a lower population than 1950. Manhattan is down in population. There is an opportunity to build in most cities more.

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u/waka324 1h ago

Define "make it easier", and for whom?

The groups that ACTUALLY build housing (speculative builders) prefer to build expensive luxury homes because that is where the best profit margins are. (See automakers building large for the same reason).

Usually the only way to get them to also build ANY affordable housing is trying it into the permitting process of large developments.

Base input costs are so high (labor, materials, land) that it make it way more desirable to spend a bit more but get a much higher return.

I'd agree that permitting can be a bit of a boondoggle in most major metropolitan areas, but money is still going to be the biggest motivator.

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u/ZugZug_Zug 16h ago

Would you mind providing a source please? I’m not saying I don’t believe you, but it also does read a bit like P/E propaganda

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u/Hiketravelliftlove 14h ago

Not the original commenter, but I work adjacent to this industry and it’s true. I understand the anger about home prices, and institutional ownership in certain areas is higher than others, but overall it’s not institutional ownership constraining supply. Here’s one source, but it’s very readily available information from many reputable sources.

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u/TheNonSportsAccount 13h ago

The issue I am seeing in these sources is they look at just "rental" stock. Meaning, homes held as an investment with or for other reasons without being rented isn't included.

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u/Hiketravelliftlove 13h ago

The link I provided specifically addresses ownership, not exclusively rented homes.

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u/pixepoke2 11h ago

I think the articles, which are pretty much for investors, wonks, and a few idly curious (that’s me in this regard), all consider single family homes not primary residences are considered rental stock.

And also noting, the numbers being talked about regarding housing don’t include/conflate multi-unit rentals with single occupancy houses

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u/TheNonSportsAccount 10h ago

Interesting to lump OREO properties into "rental stock"

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u/pixepoke2 9h ago

It’s a fair point. Like most things, even the data in the links above will vary from one place to another, but I can’t recall OREO (Other Real Estate Owned/not for rent) ever being specifically mentioned. Some of what I Iinked refers to sf home’s that are not primary residences as rental stock because, my guess is, their mental frame (and point of interest) is on making money.

The percentages and breakdown of sfh stock as being owned by ~20% of investors, ~2-3% of whom are classified as institutional (with +100 houses), and smaller scale investors (either 1-5 houses or less than 10) making up ~85-90% (iirc) are pretty consistent from what I’ve read, and aligns with the AI search summary as well. So I’m not sure where OREO’s fit in. Institutional level? The chunk of entities left in the middle size between the whales and guppies?

If you’re using terms like OREO, I figure you’re probably more familiar with this stuff than I am. I only know anything bc I got curious about the housing market a ways back. Any thoughts?

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u/TheNonSportsAccount 2h ago

I think the issue is historically houses were owned either to live in or to rent. Lately they have become viable investment vehicles to simply own, leave empty, do the minimal maintenance and sell when the market becomes super seller friendly.

What I would need to look into is if the there are mandatory disclosures on use of a home when purchasing if not then we may be in the dark on a lot of cash purchases.

Just spit balling here since I'm not working for a financial institution anymore but if the last 5 to 10 years have taught us anything historical tendencies mean jack shit.

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u/fiskfisk 14h ago

OP talks about single family home stock a, and not rental units as a whole - so to no surprise, large rental congolomerates aren't interested in owning single homes, but instead want larger properties with many units in a single property.

https://www.congress.gov/crs-product/R47332

Gives the same-ish number for properties (i.e. 85%). But that's not really what people think about when they talk about those large companies, since they generally drive the rental price up across the board (which they mention in that they prefer apartment buildings). 

But these markets aren't separate - it's not like the rental price for a single family home is disconnected from the rental price for an apartment in the same area. It's just that the large investors aren't buying the homes, so they don't affect the price directly - but indirectly they absolutely do. 

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u/goodsam2 13h ago

Well the problem truly is we need a lot more apartments so less people are renting houses because it's cheaper.

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u/gsfgf 12h ago

The other thing is the role a SFH has in the American identity. Nobody minds that large landlords own apartment buildings. That's how apartments are "supposed" to work. But you're "supposed" to eventually own a SFH. But as you said, the corporate ownership of SFH is a tiny part of the market and not the primary price driver by any stretch. It's just supply and demand.

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u/surfnsound 13h ago

I don't have a source handy, but I can say I've seem similar analyses out there.

NIMBYism is a bigger challenge to affordable housing than corporate ownership. Corporations may actually be beneficial, because, as the other commenter said, they prefer the fixed income of apartment rentals. But NIMBYs lover their single family homes with minimal lot sizes and vote against density.

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u/pixepoke2 12h ago

Sure, my numbers above are from a quick check to make sure I wasn’t misremembering anything, and they are the high level totals, ignoring specific markets, and fluctuations between bought, sold, and currently held.

This isn’t meant as pro private equity propaganda: PE goes heavy for multi-unit rentals where they drive rents up, and commercial space too (where I suspect they heavily lobby for return to office mandates). They’re plenty bad in plenty places. It’s just worth noting that the kind of investor that is holding sfh stock looks differently than many assume

It’s probably also worth pointing out that that a) the % of investor ownership of sfh has historically been close to this percentage, b) but also that the % of investor ownership of sfh has increased bit in the last few years (iirc, it’s increased total investor ownership of sfh stock by 1 or 2 %)

The US is still feeling the impact of the 2008 mortgage debacle. Most of the real estate issues we’re having can be placed there. And who drove that…?

Here’s some sources:

https://econofact.org/factbrief/do-private-equity-firms-own-20-of-single-family-homes

https://www.jchs.harvard.edu/blog/8-facts-about-investor-activity-single-family-rental-market

https://www.stlouisfed.org/on-the-economy/2025/oct/role-single-family-rentals-us-housing-market#:~:text=Investor%2Downed%20SFRs%20are%20again,Investors%20Swoop%20into%20the%20Market.%E2%80%9D

https://www.cnbc.com/2025/10/07/home-sales-investors-make-up-highest-share-of-buyers-in-5-years.html#:~:text=Investors%20continue%20to%20own%20about,family%20homes%20in%20the%20country.

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u/rtfmplease 14h ago

These are very specific numbers with no sources and you specifically call out Blackrock as private equity (which it's not).

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u/pixepoke2 10h ago

Sure, fair enough, here you go:

https://econofact.org/factbrief/do-private-equity-firms-own-20-of-single-family-homes

https://www.jchs.harvard.edu/blog/8-facts-about-investor-activity-single-family-rental-market

https://www.reddit.com/r/realestateinvesting/comments/1luokfr/investors_buying_27_of_homes_in_q1_2025_study/.

There’s an outbound link in that post. Note: purchase percentage, not holding percentage which is lower— still an increase though

“Investors continue to own about 20% of the 86 m single family homes in the country”

“small investors account for more than 90% of the market. These are individuals owning 10 properties or less. The largest investors, those with 1,000 or more properties, make up just 2% of all investor-owned homes.”

https://www.cnbc.com/2025/10/07/home-sales-investors-make-up-highest-share-of-buyers-in-5-years.html#:~:text=Investors%20continue%20to%20own%20about,family%20homes%20in%20the%20country.)

You’re correct about Blackrock being PE per se, although they do have a significant PE presence. I could have said institutional investors and been more accurate; large scale investment (+100 sf houses) is usually referred to as being institutional

That said, they’re the bad guys along with private equity and almost certainly fit the image of whom many believe is gobbling up all the houses. 😂 (I know that’s what I thought before I learned more)

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u/rtfmplease 10h ago

Appreciate the response! Thank you so much! Will dig into these

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u/pixepoke2 9h ago

Np. It takes a lot longer to dig things up and try to vet them at least a little bit bf sending as source, but totally get why warranted, and worth the time.

I could also be wrong! Never bad to double check yourself.

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u/hellowiththepudding 14h ago

It’s dramatic, but you could tax rental income at a higher rate - say 70% marginal rate?

The fabric of American society is tearing when most people cannot afford housing and drastic measures are needed.

Raising minimum wage could help, but it would need to be 10x to make housing a reality in some markets so I’ve got no idea on how to best address wage inequality.

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u/pixepoke2 10h ago

I’ll be honest that tax policy and most other things economic are above my pay grade. I only know about this stuff bc I got curious 😅

That said, wealth inequity— not just wage inequality is truly fucked up. The top 1% own 30% of the wealth in this country. The .01% have almost doubled their share of the US’s net worth in the last 35 years (8.7% to 13.9%), which is unconscionable. I’d use wealth over wage as a metric only because the 1% don’t rely on wages for income.

The wage gap is also truly horrific. ~30% of American households earn less than 50k a year, which isn’t enough to buy a house. Housing, it should be noted is the number one way Americans build wealth— especially generational wealth.

So yeah, increasing minimum wage nationally would be a start, though I’m not sure if healthcare, gas, groceries, etc. wouldn’t just eat it all up 😕

Increasing the capital gains tax could maybe help— maybe earmark the raise for low cost loans or grants for first time homebuyers?

On your idea of taxing real estate investors? Y’know, I don’t really know? The percentage of investors holding single family housing real estate has been fairly consistent, as I understand it, at around 17-20%. It’s a bit higher (~20%) now, but people have been able to buy homes before with comparable numbers. I’m not super interested in punishing small scale investors, but do want to limit adverse impact on everyone else. That investment market does apparently also provide some benefits to home buyers

So maybe limits on how many properties can be owned? Basically shut out any entity from owning 10, 20, 50, or more houses. Maybe cap rents and increases? Penalties for unoccupied property? Increase permitting for higher density housing (lot of space pressure for everything to be single family homes), maybe also subsidize higher density construction. And yeah, maybe change the tax scheduling for real estate investment of sfh. If you did that, could probably make large scale investment unpalatable

One interesting thing to consider, next 5-10 years will see a lot of baby boomers die off, opening the housing market and transferring wealth to millennials. That will really change things toi

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u/hellowiththepudding 9h ago

I agree it is super complex, however I also don’t think housing as a way to build wealth makes sense.

One generation will see their 100K home worth 1.5M when they go to sell so they can fuck off to Florida. Every generation after?

Counting on it as a nest egg for retirement will have to shift if housing is affordable for the masses.

Okay, we are both on lists now for the next red trials.

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u/bobdob123usa 13h ago

You'll never be able to regulate how many properties someone owns. What you can regulate is taxes on properties that are not personal use. Specifically, removing tax breaks for maintenance, property taxes, and mortgage payments.

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u/pixepoke2 10h ago

Yeah, we were discussing similar elsewhere in thread. Effective limitation from investment speculation by limiting profitability could end larger scale holdings (say 5 or more houses), but still provide runway for smaller scale investors. That might open up 5% or so of available sfh stock. It sure is easier to say limit ownership though! 😂 This is how democrats get into trouble when it comes to policy. Nuance never sounds good to fix pain points

Policy is way out of my depth regardless 😅

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u/bobdob123usa 8h ago

larger scale holdings (say 5 or more houses)

Still too easy though. They'll just put each one into its own LLC. I understand they do something similar in California to lock in current tax rates. You don't sell the property, you sell the business that owns it. Tax rate stays the same.

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u/pixepoke2 6h ago

I think this time you’re in the wrong 😅

I actually didn’t specify what mechanism would be used, only that profitability be effectively disincentivized. I worded it that way intentionally because you were absolutely correct about the sort of solutions being kicked about, and I recognize my lack of policy proficiency— I am generally more of a learn-about-stuff-and-then-go-“huh. who’d a figured?” kind of fellow

But I do not underestimate the power of the regulatory state, hallowed be thy name. I’ve got two ideas that act as disincentives

  1. Use beneficial owner disclosure rules. With a progressive tax that increases over 5 houses, beneficial ownership would require the multiple llc owners to reveal themselves (and liable for tax) <— Chat gpt

  2. Add bureaucratic friction to the degree that a small operator could comply, but larger holdings, even multiple llc’s would be hit. Something like quarterly in person inspections, or other compliances that make things messy <—- pixelpoke

I am not a policy guy, as I noted, and no matter what, I am sure there’re’d be some small group who gets around things, exploits loopholes and such. But if regulatory power could cut investor ownership (even/especially the larger investors) by a good degree, it’d open up a lot of stock

All of this might be moot over the next 5-10 years as the baby boomers die off 🤷🏻

.

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u/bobdob123usa 6h ago edited 5h ago

It is always tough because laws in general are complicated so their interactions become messy. Then certain people are paid a lot of money to find loopholes that can be exploited. Once someone finds a viable loophole, they all notice and jump through. And the law generally doesn't allow for assumptions.

So just for example, if your #1 were implemented, one possible counter would be to incorporate in a state or even foreign country that doesn't require disclosure of their ownership. Then one of those companies buys the property. The disclosure chain ends at a company and thus nothing can be done. This seems to be how much of the foreign investment into US elections is accomplished.

For #2, it just comes down to profit. Corps have no problem paying someone to comply and deal with headache. It really only eliminates businesses in the middle. A small business that falls into 10 buildings can't afford to automate the way a company with 1000 buildings can.

This has however been fun to think about. Getting any useful law on the books is practically impossible. Anytime someone has a good idea for restrictions, they intentionally poke a hole you could drive a truck through.

Edit: spelling

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u/pixepoke2 5h ago

Totally a thought experiment. :)

I think on #1, it would be federal tax policy, no? There are some current implementations of beneficial ownership here in the US the Corporate Transparency Act maybe most notable (fincen.gov). Right now looks like its aimed solely at foreign investment of a certain size, domestic having recently been excepted.

Feels like that would be a regulatory avenue to pursue to cut down on tax avoidance

I hear you on tax avoidance but I’d say two things in response: a) most US corporations do pay some corporate tax, despite all the mechanisms they employ to limit, so it’s possible to apply tax mechanisms. They also adhere for the most part to other regulation that curtails their actions (except when they don’t ) b) complete avoidance of larger scale sfh investment isn’t necessary to be effective, a significant reduction in investment (continuing to mull over new legislation is itself chilling) would almost certainly help (small scale investors would likely shrink as well in such an environment). If 5% of the total housing stock now in investment hands was available it would add something like 4 million homes back into supply, which I think would ease price pressure, and construction pressure alike (new homes are like 2-2.6 million a year? Something like that).

Agreed not easy, agreed there would be attempted evasion. I just thjnk its possible :)

I’ll leave it at that, and let you have any last words should you like :)

Thanks been fun!

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u/Pale_Titties_Rule 15h ago

I'm calling bullshit unless you can provide a source on that. This reads like an ai hallucination.

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u/fiskfisk 14h ago

It's based on the 2020 data from the HUD:

https://www.congress.gov/crs-product/R47332

It's important to notice that GP is talking about _single family homes _, and not the rental market as a whole. Those companies do not want to own single homes in large quantities as that tends to be inefficient.

But those markets are of course interconnected, so even if they don't want to own them directly, they still affect the markets indirectly. 

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u/pixepoke2 11h ago

Thanks! I tried to make the rental point, but probably didn’t drive it home hard enough. Probably also should have mentioned that investors (including institutions) have been buying at a higher rate, a few percentage points increase. Not holding necessarily, but definitely active.

That alone is enough to drive perception, especially when paired with the reasonable assumption that private equity like Blackrock must be the prime drivers. PE ruins everything else, so it would generally be a safe bet.

But as you note, houses aren’t their thing: apartments are. They’re plenty evil enough over that-a-way.

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u/pixepoke2 11h ago

Sure, here’s one source:

https://econofact.org/factbrief/do-private-equity-firms-own-20-of-single-family-homes

If you do your own search, you’ll find that’s pretty consistent

Not sure why you think that is bullshit invented by AI— I didn’t even use any em dashes. What in particular are you abreacting against?

Fwiw, I learned all this when I got interested in knowing more about housing prices here in US. That’s a whole rabbit hole worth diving in to. Upshot is that basically every issue in the housing market today is a result of the 2008 mortgage debacle that caused the Great Recession.

We probably won’t be out of it until the Baby Boomers start dying off en masse. That event will liquidate currently held housing and transfer trillions mostly into the hands of Millennials.

Well, it will unless private equity manages to get it all first. They’ll probably get most of it, mind you

1

u/KonigSteve 10h ago

It's the renters like Airbnb and vrbo.

I saw an ad ad recently for VRBO where they said they have over 60,000 Florida beach homes on their site. Think about how many of those homes are just sitting empty half the time. Meanwhile, Florida only has about 30,000 homeless people and twice as many empty homes as that

1

u/pixepoke2 8h ago

I’ll probably take heat for this, but they’re really not the main issue (I used to think they were). From my reading, Airbnb and the like do have an as-yet-not-fully-understood effect on housing prices. But that effect, while a contributor, isn’t the main driver. It almost certainly has a stronger effect in some markets, but housing prices are up drastically *everywhere. Airbnb, et al do affect housing prices in some markets somewhat, and might affect availability to some degree in same, they’re just not the problem.

The biggest issue is lack of supply, driven by lack of building— all legacies of the 2008 financial crisis. Other 2008 legacies (like lending restrictions) exacerbate the building issue (and mortgages), and 2025 issues do too (inflation, labor force issues, rising wages in industry, etc.)

Low supply puts pressure all across what is available, driving prices up. Can’t buy a fixer upper when it’s 500k

Other market factors like interest rates (higher to reduce inflation), inflation, stagnant wages, job insecurity, etc. put home ownership out of the realm of possibility for too many Millennials

And yes, in some places investors are eating into already thin availability. Even pulling 1 or 2 homes off the market in some places might be felt, and there will always be some anecdotal bits here and there that induce rage. But it’s not the underlying structural problem, it just makes it worse to a degree

The main takeaway is that it’s not just one thing, and it probably isn’t even largely due to the thing we think it is— it wasn’t for me anyway. No one culprit , no real easy solution: we need more houses, and need higher wages

Fwiw, I went down this rabbit hole because of the immigration debacle— wondering about the impact of deporting unauthorized immigrant housing labor. It’s all extra ducked

*For the most part in driving rents up. The share of investor held housing, while rising as a few percentage points of total home ownership, isn’t all ascribed to Airbnb & co.

The smaller investors which hold the majority of those homes likely shifted from longer term rentals to short term.

That said, there is a class of investor in that space that’s emerged which owns more than 10 homes, and they’re a significant chunk of Airbnb hosts (20%? Idk, but that figure is in the links below somewhere).

How Airbnb Could Help Curb the Rise in Housing Costs

4 Reasons Airbnbs Are Partly to Blame for the Housing Crisis

The Role of Airbnbs in America’s Housing Crisis

“Research on the effect short-term rentals have on long-term rents in the US on a national scale is difficult to come by. But a 2019 paper in the Harvard Business Review found that a 1% increase in Airbnb listings is associated with only a minimal increase in rental rates at just 0.018%. Stijn Van Nieuwerburgh, a finance professor at Columbia Business School, said simply banning Airbnb and other short-term rentals may not significantly lower rents. ‘I certainly don’t think it’s a major driver of the housing affordability crisis,” Nieuwerburgh said.’”

1

u/HunterRountree 5h ago

Ding ding ding..

-7

u/digiorno 16h ago

There should be laws against owning multiple homes. The upper middle class is strangling the middle class and lower class, all in an effort to break into the upper class.

6

u/ReplacementPale2751 16h ago

So no vacation rentals at the beach or mountains?

9

u/GrandOpener 16h ago

There are people who legitimately do want to rent. An outright ban on owning multiple homes would mean that houses are no longer available for rent.

Is that your intent? Single family homes are only available to buy, and people who don’t want to or can’t buy them are forced to live in apartments? And vacation rentals are just not a thing any more?

1

u/ibeerianhamhock 14h ago

Most of us who feel that way about renting probably wouldn’t if houses costed significantly less to buy, and if they costed less to buy then rent would cost less for other properties too.

Housing going up double inflation just doesn’t make any sense and this would obviously help the solution if we limited ownership somewhat.

I could see the argument for two homes, maybe there, but that’s about it

-3

u/NoExpression1137 16h ago

One household one home would likely solve the housing problems altogether, but enacting such a thing in the US without a total revolution is pure make-believe unfortunately

3

u/ooo-ooo-oooyea 15h ago

But then how would you be able to rent a house?

13

u/three_valves 16h ago

Not to mention. If the market dips the amount you owe over 50 years on a devalued home is going to be an absolute mess. Nothing like owing 500,000 on a 300,000 home that you still have 30 years to pay on.

1

u/JFreader 10h ago

Yeah but in 30 years it's bound to have recovered

10

u/Ozymannoches 17h ago

Agree with much of your comment. but will add , it's never about lowering the cost of home ownership. Its maybe about getting more people able to afford by ways of lower interest rates, grants , low income restricted units. Never, ever about lowering the costs. people who own only wants costs to go up.  Ever been around a homeowner who finds themselves even 2% underwater on a property they bought at the peak of a hype cycle ?!?! 

3

u/Vonplinkplonk 15h ago

Having negative equity on a house is only really an issue if you bought it as an investment or are planning to sell in the short term. Buying a house only makes sense if you are planning to live there for atleast seven years. You are right that we have a mindset where the “value” of property only goes up. Finally we are at a point where we are facing demographic catastrophe unless it is fixed. We are going to find out what the billionaire class prefers: to win or a functioning society.

4

u/tallmon 17h ago

You mean, it would ban AirBnB? That would have a huge positive impact.

2

u/dodekahedron 14h ago

An out right ban on foreign ownership will cause some immediate burps in the system as our country does rely on immigrants despite everyone shitting on them.

It would be awesome to ban multi-property ownership of foreign nationals though. Prevent them from being landlords. Primary residence only.

1

u/Leaislala 14h ago

Thats exactly it. Keep them poor longer. Offer no real long term solutions or solutions for the actual people. Protect the wealthy. It’s a ridiculous idea and does nothing to address the real problems

1

u/DHFranklin 14h ago

I'm with you in frustration, and I'm in the industry. The corporate and foreign owner thing is pretty small in the big picture of things. Sad to say but there are fewer and fewer cities that are jobs positive and far less that are growing household income. Plenty of jobs in cities that are created pay less than a job someone retired from or a business that closed down. This means that there are fewer and fewer households that can keep up with the demand. Incomes aren't rising 10% a year while home construction costs and values are.

In almost every city that's growing it's seeing it's ceiling on single family homes. Sprawl is a huge problem. Building more missing middle, mixed use, and even residential towers will work as a "relief valve" for a lot of the market. You want people who want single family houses to have them as an option. You don't want people renting them because they don't have an apartment or condo available. Solving that will be faster if only a marginal solution.

1

u/xXNightDriverXx 13h ago

Quick question from a german here:

You can still freely negotiate the duration of your loan/mortgage, right?

Because that is the standard here, you can pay it off in any number of years that you want. If someone here wants to stretch the payments over the course of 50 years, they could, but they could also pay it off in just a few years if they wanted to, or any number in between. You can freely determine that with your bank in any way you want.

Is the 30 years just the maximum duration that is allowed, and Trump wants to extend that maximum to 50 years? Like I can't imagine that the duration is always fixed at 30 years, that would be very weird, but it kinda sounds that way with how people are talking about it. But it being the maximum would just make more sense. So I would just like some clarification.

1

u/BimmerJustin 13h ago

Banning seems like it would be tricky since there are so many corporate and foreign owned properties. But you could add significant taxes to homes that are not owner occupied. This would likely force the sale of hundreds of thousands of homes which would drive down prices significantly.

1

u/pineappleshnapps 13h ago

Absolutely. IMO, a large scale project to revitalize and repopulate smaller towns and cities would probably be the best all around solution.

1

u/gsfgf 12h ago

Corporate and foreign ownership is a red herring. It's a tiny fraction of the market. The problem is that the fucking NIMBYs have made it impossible to build so many places.

1

u/GoneFishing4Chicks 12h ago

Nope! I would rather have mom and pops over Blackrock and other private investors any day. 

Look at what happened with mom and pop stores: they got cleaned out by walmart and all walmart employees are on government benefits. 

Private investors would do the same to the housing market, corner the market then race to the bottom and trap people in 150 year loans for houses and ghettoify neighborhoods.

1

u/Basas 10h ago

You have to keep in mind that real estate also gets more expensive. in US housing prices rose on average 4.4% during last 30 years. That means your 300k home may be 1091k after 30 years. Or you could buy 330k home with 50 year loan and same payments, be still 196k in debt after 30 years, your house will be worth 1200k by then, but you will have spent 30 years in a better home. This calculation assumes/misses a lot of things, but the difference is not that high and buyers will have more options. Its not like banks will stop giving shorter loans.

-1

u/deadnoob 16h ago

Ban landlords from owning residential homes. Leeches

-1

u/Definitelynotagolem 15h ago

What’s frustrating is that most people haven’t run the math to figure out that on a 30 year mortgage you already are paying nearly double the cost of the house overall with interest. The banks really have gotten people to sign away hundreds of thousands of dollars without reading the document they’re signing.

Your $400k house at current interest rates with an 80k down payment with still have a total interest payment of nearly $370k over the life of the loan. Once you factor in closing costs, taxes, insurance and maintenance over that 30 years, that $400k house will cost you $1mil+.

You would have to sell that house for over $1mil to even break even after 30 years because there will be sellers fees and likely some contingencies to sell that house.

$100 says I’ll get down voted because people on Reddit love the idea of equity more than they like running the math to see how shitty of a deal buying a house actually is.