Why Homes Feel Expensive (It’s Not Investors)

If you scroll through social media or watch the news, you’ve probably seen a lot of people blaming “big investors” for high home prices. It’s an easy explanation — big corporations buying up all the homes, right?

But here’s the truth: that idea doesn’t match the data.

Across the country, most homes are still bought and sold by regular people, not large investor groups. So, if it’s not big investors driving prices higher, what’s really going on?

Let’s take a deeper, more realistic look at what’s causing homes to feel so expensive — and what that means for buyers, sellers, and homeowners today.

1️⃣ The Investor Myth

It’s true that investors play a role in the housing market — especially in popular or fast-growing areas. But they’re not dominating the market the way people think.

Nationwide, research from Realtor.com shows that only about 2.8% of all home purchases last year were made by large investors (defined as companies owning 50+ properties). That means roughly 97% of homes were bought by everyday buyers — families, first-timers, and individual investors looking for a single property.

While some neighborhoods may have a higher investor presence, big investors aren’t the main reason homes cost so much. The data shows it’s something much more fundamental — and much harder to fix.

2️⃣ What’s Really Driving Prices Up

The biggest factor behind today’s home prices isn’t who’s buying homes — it’s how few homes there are to buy.

Economists across the board agree: the U.S. is facing a housing shortage that’s been building for years. For over a decade, we simply haven’t built enough new homes to keep up with the number of people who want to buy.

Robert Dietz, Chief Economist for the National Association of Home Builders, puts it simply:

“The fundamental driver of housing costs is the shortage itself — the mismatch between the number of households and the number of available homes.”

When demand is high and supply is low, prices naturally rise. It’s basic economics — and that’s exactly what’s happening in real estate right now.

3️⃣ Why There Aren’t Enough Homes

The shortage comes from a few key issues that have stacked up over time:

🏗️ Slow New Construction – Building slowed dramatically after the 2008 financial crisis. Even though demand recovered, construction didn’t. Developers faced high costs for land, labor, and materials — and local zoning laws often limited where and how much could be built.

📈 Rising Costs – The price of lumber, concrete, and other construction materials skyrocketed during the pandemic. That made it harder and more expensive for builders to create affordable housing.

🏠 Homeowners Staying Put – Many current homeowners are staying in place longer than ever, especially those with low mortgage rates from a few years ago. That means fewer homes are hitting the market, even as demand stays strong.

Together, these factors have created a tight market — too few homes for too many buyers.

4️⃣ What This Means for Buyers

If you’re looking to buy a home, it’s easy to feel frustrated. Prices are higher, competition can be intense, and interest rates have risen from their historic lows.

But there’s good news: more inventory is finally starting to appear. Builders are slowly ramping up production, and some homeowners are deciding to move after sitting on the sidelines for the past couple of years.

That means buyers may soon have more options and slightly less competition, making it easier to find the right home without overpaying.

5️⃣ What This Means for Sellers

If you’re a homeowner thinking about selling, the shortage works in your favor — low supply keeps prices strong.

Even with interest rates higher than before, demand for homes in many communities remains steady. Well-priced, move-in-ready homes continue to sell quickly.

If you’re curious what your home might sell for in today’s market, it’s worth finding out. You may be pleasantly surprised by how much equity you’ve built.

6️⃣ The Path Forward

Long-term, the best way to ease housing costs is to build more homes — and to encourage policies that make that process faster and more affordable.

But in the meantime, understanding what’s really behind home prices helps cut through the noise. It’s not greedy investors or mysterious outside forces. It’s simply a supply-and-demand imbalance that will take time to fix.

The encouraging news? We’re moving in the right direction. New construction is increasing, and more sellers are returning to the market. As the supply grows, prices will start to stabilize — and homeownership will become more accessible again.

🏠 Bottom Line

It’s easy to believe big investors are to blame for expensive homes, but the data tells a different story. The real issue is that there haven’t been enough homes to meet the demand — and that’s what’s pushed prices higher.

As more homes become available, buying may start to feel more realistic again.

If you’re thinking about buying, selling, or just curious about your home’s current value, I’m here to help you make sense of today’s market.

📞 To connect with me directly, contact me at 917-254-2103.
For your FREE Home Evaluation, Homeowner Resource Guide, or Home Buying/Down Payment Assistance Guide, visit https://bit.ly/45URvuV or text HomeswithJustin to 85377.