Here is the definition of a U.S. home sales market out of control and increasingly dominated by banks and other “cash investors” including wealthy people. Upon the latest (September) report on new homes having reached $408,000 in median price, 18.7% higher than in September 2020 reported Reuters on Oct. 26. Whereas a separate article by CNBC the same day, quotes the deputy chief economist at CoreLogic, Selma Hepp, as follows: “Persistently strong demand among traditional homebuyers has been amplified by an increase in demand among investors this summer. While strong home price appreciation rates are narrowing the pool of buyers, particularly first-time buyers, the depth of the supply and demand imbalance and robust demand among higher-income earners will continue to push prices higher.”
Outside the sphere of the wealthiest households, the extreme price pressure is forcing would-be home buyers into renting, and Wall Street firms like Blackstone, owning hundreds of thousands of single-family homes for rent, are ready for them. Again according to CoreLogic, the national average rent had risen in September by 9.8% since September 2020. And Bloomberg reported Invitation Homes Inc., the biggest owner with about 80,000 rental homes across the country, increased rents by 11% in the third quarter alone. They raised rents by 8% on renewals and 18% on new leases.
The general economic category of “shelter” is the fastest-inflating consumer or household expenditure in the United States, but it is one the monthly consumer price index (CPI) fails entirely to report.
