By: Crystal Lake | Realtor

If you think your child’s biggest competition in the housing market is other first-time buyers, think again.

Today’s young homebuyers aren’t just competing against each other – they’re up against institutional investors, corporate landlords, and all-cash buyers. These powerful players are driving up home prices, making it even harder for everyday families to buy their first home.

So, what’s happening? And more importantly, how can parents help their kids beat the competition?

The Investor Takeover: How Corporations Are Buying Up Homes

Institutional investors – Large corporations, hedge funds, and private equity firms have been buying single-family homes at record rates.

• In 2023, investors purchased nearly 25% of all single-family homes in the U.S. (SOURCE)
• Many of these investors pay in cash, outbidding regular homebuyers.
• Some firms own tens of thousands of rental homes, turning homeownership into a corporate asset class.

This isn’t just happening in big cities. Corporate investors are buying up homes in suburban and rural areas too, making it difficult for first-time buyers everywhere.

Why This Is a Problem

• Higher Home Prices – investors bid above asking price and pay cash, making it impossible for regular buyers to compete.

• Fewer Homes Available – every home brought by an investor is one less home for a family to own.

• Rising Rents – instead of selling homes, many investor convert them into rentals, keeping families trapped in long-term renting

For young buyers, this means homeownership is no longer just a financial challenge, it’s a structural one.

How Parents Can Help Their Kids Compete In an Investor-Dominated Market

With cash-rich investors snatching up homes, how can parents help their children stand out? Here are some strategic ways to level the playing field:

1. Making a Competitive offer (Without Overpaying)

Investors win by offering fast, no-contingency cash deals. While first-time buyers may not have that flexibility, parents can help:

– Gift funds for a stronger down payment, making financing more attractive.

– Waive unnecessary contingencies (but keep inspections for safety).

– Offer a quick closing timeline by getting pre-approved before house hunting.

2. Partnering with Your Child on the Purchase

Instead of competing as a single buyer, consider buying the home together:

– Shared Equity Agreements – You invest alongside your child, sharing future appreciation.

– Family Loans – Provide financing yourself instead of relying on a bank.

– Buying the Home & Renting to Your Child – A great option if your child isn’t financially ready but wants to enter the market.

3. Exploring New Home Options

Investors focus on specific types of properties. Often single-family starter homes. Parents can help their kids think outside the box:

– New Construction Homes – Often have incentives for first-time buyers.

– Condos/Townhomes – Less attractive to corporate investors.

– Different locations – Looking in up-and-coming areas can provide more opportunities.

The Bigger Picture: What Happens If Investors Keep Buying?

If the trend of investor homeownership continues unchecked, the long-term consequences could be severe:

• Homeownership rates will decline – A future where most Americans are renters is becoming a real possibility.
• Wealth inequality will grow – Homeownership has historically been the #1 way middle-class families build wealth.
• The housing market will become even less accessible – If corporations control more housing, home prices will be dictated by profit motives, not affordability.

While the government has started to crack down on corporate ownership, change is slow. In the meantime, parents are in a unique position to help their kids navigate this evolving market.

Final Thoughts: Taking Action Before It’s Too Late

Your child shouldn’t have to compete against billion-dollar hedge funds to own a home, but that’s the reality today.

While we can’t stop investor takeovers overnight, parents can make a direct impact by:

– Helping with competitive offers.

– exploring creative financing options.

– Guiding their child toward investor-free markets.

The housing market has changed, but homeownership is still possible with the right strategy. Thinking about helping your child buy a home? Let’s discuss the best approach for your family.