The 2025 US housing market presents a perplexing scenario: home sales are declining, and the number of sellers far exceeds buyers, yet prices continue to soar to unprecedented levels. Over the past decade, home values have surged nationwide, even in once-affordable Sunbelt cities. Policymakers, however, seem unprepared to address this crisis. In a July 2025 interview with the New York Times, 16 US mayors identified housing as a top concern. During her 2024 presidential campaign, former Vice President Kamala Harris proposed tax credits for first-time buyers, while President Donald Trump has renewed calls for interest rate cuts to reduce mortgage rates.
Homeownership remains a cornerstone of the American dream, with rates historically hovering around 65% from 1965 to 2025, according to Trading Economics. However, the peak was in 2004 at 69%, and despite a temporary spike during the Covid-19 pandemic, the rate has been steadily declining. Alarmingly, even among homeowners, equity is shrinking, with many owning less than half of their property’s value due to debt.
Structural issues exacerbate the crisis. Construction costs have skyrocketed, labor is scarce, and tariffs have increased material prices. Zoning laws, tax regimes, and anti-density regulations have stifled urban growth, while sprawling development faces geographic and environmental limits. Mortgage rates remain high, and the national housing shortfall, now estimated at over 4.5 million, continues to worsen.
The crisis has attracted new investors. Corporate actors are increasingly entering residential real estate, drawn by stable returns in a tightening market. Though they still own a minority of US housing, these firms are concentrated in key regions, threatening the post-World War II surge in widespread homeownership.
Large-scale corporate ownership of homes and influence over rent prices is a recent development. Before 2008, institutional investors focused on apartment buildings and urban areas, as single-family homes were seen as too dispersed and costly to manage. The housing crash changed this, with foreclosures making suburban homes available at deep discounts. Since then, major institutional financial actors have invested heavily in US single-family housing, acquiring up to 300,000 houses and renting them out.
Government-backed mortgage giant Fannie Mae began selling foreclosed homes in bulk to investors in 2012, demonstrating that single-family housing could be profitable at scale. Fannie Mae and Freddie Mac expanded support for institutional buyers through favorable financing terms and lower rates. Meanwhile, homebuilding collapsed, leading to a supply shortage.
The Covid-19 pandemic accelerated this trend. Remote work drove people from cities to suburbs, and eviction moratoriums pushed small landlords to sell, opening the door for larger buyers. Digital platforms made it easier to browse, purchase, and manage properties remotely.
Blackstone, one of the world’s largest private equity firms, became a pioneer in large-scale housing acquisitions after 2008. In 2012, it helped launch Invitation Homes, now the largest owner of single-family rentals in the US. Other major firms, like Progress Residential and Amherst Holdings, have followed suit, using advanced algorithms and AI to identify and acquire homes efficiently.
Real Estate Investment Trusts (REITs), originally designed to give everyday investors access to real estate profits, are now dominated by major institutional firms like BlackRock and Vanguard. These firms have been criticized for excessive fees, maintenance failures, and improper eviction tactics.
Corporate homebuying continues to climb. Institutional investors bought 15% of US homes for sale in the first quarter of 2021, increasing to nearly 27% by early 2025. In some markets, investors accounted for 44% of all home flips in the third quarter of 2024.
Big Tech has also become essential to the expansion of corporate housing. Tools like YieldStar, a rent pricing software developed by RealPage, use algorithms to recommend optimal prices, influencing rent markets significantly. Short-term rental platforms like Airbnb have reshaped housing, contributing to higher rents in many cities.
Addressing the issue requires public involvement and policy changes. The city of Austin is a rare success story, with median home prices falling due to increased affordable housing construction. However, without effective measures, the concentration of land in private hands will only grow, threatening affordability and public access to housing.
