You'll Own Nothing And Be Happy: Wall Street Betting On Rentals

This article is from about a year ago, and seems to explain why our money overlords are so convinced that we (commoners) will own nothing and be happy. The article is "Wall Street Is Betting Billions on Rental Homes as Ownership Slips Out of Reach." It begins by relating the story of a woman who was happy that, even though she couldn't afford a house, was able to rent a nice home. The article then goes on:

     AvalonBay is part of a rush of institutional investors and private-equity firms pouring into the build-to-rent market, a subsector where developers construct neighborhoods of single-family homes for the sole purpose of leasing them to tenants, rather than selling them to prospective homeowners.

    They are aiming to capitalize on a growing cohort of people who felt they would become homeowners as they move to the next stage of life and start a family but are increasingly viewing renting as a more affordable long-term option.

    From 2021 to 2023, the share of build-to-rent housing starts doubled to 10% of overall single-family housing, according to the National Association of Realtors’ analysis of U.S. Census Bureau data.

    Blackstone, Invitation Homes and Pretium Partners are among the big Wall Street firms expanding their build-to-rent portfolios as demand for rental housing balloons.

     For the first time in more than two years, the growth of the U.S. renter pool has outpaced that of homeowner households for the past four quarters, according to a Redfin analysis of U.S. census data. In the third quarter, the formation of renter households increased 2.7%, three times faster than homeowner households and the second fastest rate for renters since 2015.

    The rapidly expanding renter pool is a direct response to the widening gap between how expensive it is to rent versus own a home in the U.S., especially as mortgage rates stay heated at nearly 7% with no immediate signs of cooling.

[snip]

    But some economists say that the build-to-rent movement is shifting developers’ attention away from the home-buying market where more supply is needed to normalize prices.

    In the Sunbelt, for example, instead of new housing supply “coming onto the open market,” it is “being diverted” for build-to-rent activities, Moody’s director of economic research Ermengarde Jabir said.

[snip]

     Birenbaum of AvalonBay said build-to-rent developments don’t come at the cost of for-sale supply because the firm isn’t acquiring rentals that an individual homeowner would have otherwise purchased.

    “We are not competing with individuals trying to buy individual homes in the private market,” he said.

That is a disingenuous statement. They may not be purchasing homes that were on the open market, but they are diverting contractors and suppliers away from building homes that would have gone on to the open market and instead are building homes for these investment firms. Thus, it lowers the supply of homes further driving up the prices.