Gov. Abbott takes aim at investors hounding single-family market

Texas Gov. Greg Abbott may have already signaled where he wants the 2025 legislative session to go, at least in part.

In a Friday post on the social media platform X, formerly Twitter, the governor wrote: “I strongly support free markets. But this corporate large-scale buying of residential homes seems to be distorting the market and making it harder for the average Texan to purchase a home. This must be added to the legislative agenda to protect Texas families.”

His comment was a response to a viral post from the @WallStreetApes account that collected over 700,000 views by Friday afternoon.

The WallStreetApes post said “new reports show economists have been lying to all of us about the rate financial firms have been buying up all single-family homes.” It continued by saying in 2023, private equity firms purchased 44% of all single-family homes in America. It said that “means death for our middle class.”

Private equity firms are again expected to buy another 44% of single-family homes in 2024, according to the post. By 2030, private equity firms would own 60% of all homes in the U.S., it said.

WallStreetApes did not cite a source for its data about private equity ownership.

The Texas legislature’s next 140-day regular session isn’t set to commence until Jan. 14, 2025. Abbott is authorized to designate issues as emergency items, which would allow lawmakers to act.

Figures cited by WallStreetApes, which has more than 300,000 followers, are similar to those that circulated in a viral Medium post late last year. A Housing Wire story dove into the claim made in the Medium story and reported about 30% of homes are owned by investors, with mom-and-pop shops owning the majority of them.

The investor rush into the single-family space is credited with some of the rise in home prices in markets that have traditionally been more affordable.

Dallas-based Invitation Homes, for instance, is one of the nation’s largest investor-backed buyers of single-family homes that it converts to rentals. It owned about 85,000 homes in key markets in the Sunbelt and western U.S. at the end of 2023, according to a regulatory filing. Some of those homes it has purchased as part of joint venture agreements with homebuilders and involve new housing stock.

Similar rumblings have been heard in the commercial real estate space in recent years as out-of-town investors gravitated to Dallas-Fort Worth in the wake of the COVID-19 pandemic and prices escalated swiftly.

But measuring the impact and influence of private investors in the single-family market is far more difficult to quantify than in the commercial space.

Companies often create new entity names to go with new business efforts or even for single transactions. Complicating that further, some private citizens use limited liability corporations for their homestead holdings.

However, if it is hypothetically possible to extract investor ownership from the residential market, the question comes down to when that becomes problematic. When a person owns a single investment property that’s rented for supplemental income? When a person owns 10 homes as their primary income and rents them out as short-term rentals? Is it only institutional ownership? Or is it only out-of-state institutional ownership?

Those may be questions Texas legislators will have to ponder next year.