/// THIS WEEK
Earners,
Private equity gets a lot of blame right now, and some of it is fair. Before you write off homeownership or assume the deck is permanently stacked against you, it helps to actually understand how the machine works.
This week, we break down private equity’s role in housing and what smart earners should take away from it.
[ WHAT’S THE STORY AND HOW DID WE GET HERE ]
After the 2008 financial crisis, a flood of distressed properties hit the market. Institutional investors moved fast, spending $36 billion to acquire over 200,000 single-family homes between 2011 and 2017 [The Atlantic]. This was a calculated bet on markets with constrained supply and growing rental demand [Democracy at Work].
The pandemic added fuel to the fire: ultra-low interest rates and a surge in remote-work migration pushed demand into affordable Sun Belt markets, the same ones private equity firms had already identified for their “constrained supply”. By 2024, first-time buyers were older, fewer, and competing against capital at a scale most had never seen.
It’s worth being precise about the cause here: private equity didn’t create the housing shortage. Restrictive zoning, slow permitting, and decades of underbuilding did that. But institutional capital moved in to widen the gap, making it harder to close, particularly in lower-income Southern and Rust Belt communities, where families had just enough purchasing power for a starter home.
/// DATA
Nearly 9% of residential parcels across 500 urban counties are corporately owned, roughly 1 in 11 [Lincoln Institute of Land Policy]
In some metros, that concentration is much higher. Institutional investors owned roughly 25% of Atlanta’s single-family rental market in 2022, with similar figures in Jacksonville (21%) and Charlotte (18%) [Accounting Insights]
The median first-time homebuyer age hit 38 in 2024, according to NAR. Though Redfin, using Census Bureau data, puts the figure closer to 35 years old, and both datasets agree on the same long-term trend: Americans are buying homes later in life than they did a decade ago [Redfin].
Just 26% of adult Gen Z’ers owned a home in 2024, essentially flat for the third consecutive year [Redfin/Census Bureau].
Here’s what makes this more interesting than it looks on the surface: Gen Z buyers, though still just 4% of the market, are already challenging old assumptions. Among Gen Z buyers, 35% were single women, the highest share of any generation, 17% were unmarried couples, also the highest among age groups [Housing Wire].
About 87% of Gen Z say homeownership is important to building wealth, and they are acting on it creatively, using FHA loans, down payment assistance programs, and family gifts to make it work [National Association of Realtors]. The desire for homeownership exists for a few Gen Zers, and their path looks far less linear than in previous generations.
[ TAKEAWAY ]
The same supply constraints that made these markets appealing to billion-dollar firms remain. That means markets with new construction pipelines, loosening zoning laws, or meaningful policy reform are where the next opportunities will surface, and they are already starting to.
Policymakers are responding. For instance, New York has proposed giving individual buyers a 75-day window before institutional investors can bid on single-family homes. Washington State is weighing caps on corporate ownership altogether [The Atlantic]. These are structural policy changes that shift the competitive landscape in favour of individual buyers who are prepared to act.
Ultimately, the goal is to understand how Private Equity firms think. Identify supply-constrained markets, watch for policy tailwinds, and position yourself ahead of the curve.
In the featured episode, I get into how Gen Z is actually navigating this market and whether homeownership is still the goal. The answer might surprise you.
Earn more,
TCE
To watch the featured episode, check out the video below:
