John Burns Real Estate Consulting has said pensions and private-equity firms are competing with young homebuyers which will make home costs 'permanently more expensive,' The Wall Street Journal reported.
The outlet highlighted that investors, rather than young Americans, are benefitting most during an era of the cheapest mortgage financing ever while inflating home prices at alarming rates. Rents are also rising as home prices increase.
Rather than letting young homebuyers have a chance at the homes, investors are snatching up the properties and reselling them at a premium or renting them out - often to tenants unable to afford to get on the property ladder because of rising prices.
The consulting firm noted that home prices rose 11% in 2020 even as the COVID-19 pandemic raged. Home prices will rise another 12% this year and another 6% in 2022, the company estimated.