What Percentage of US Homes Are Owned by Corporations?

The percentage of United States homes owned by corporations has become a topic of increasing public interest. This growing curiosity reflects a broader societal discussion about the evolving dynamics of the housing market. Understanding the scope of corporate involvement provides valuable insight into the current landscape of residential real estate.

The Current Landscape of Corporate Homeownership

The overall percentage of U.S. homes owned by corporations varies depending on the definition of “corporate ownership” and the type of property considered. When focusing on single-family rental housing, institutional investors own roughly 2% of the stock nationwide. However, other analyses indicate that investors, including second-home buyers, purchase about 25% of all homes sold. Rental home investors are estimated to own approximately 9.9% of all homes in America, an increase from 9.0% in 2005.

Some research suggests that firms owning at least 1,000 homes account for about 0.67% of the U.S. single-family housing stock. Another estimate indicates that large institutional investors own around 3% of the single-family rental stock. Non-individual investors increased their ownership of rental properties from 18% in 2001 to 27% in 2021. These percentages highlight that while large corporations hold a small fraction of the total housing market, their presence is more pronounced within the rental segment.

Types of Corporate Entities Acquiring Homes

Corporate entities involved in U.S. homeownership fall into two broad categories: large-scale institutional investors and smaller, often local, corporate structures. Large institutional investors include publicly traded Real Estate Investment Trusts (REITs), private equity firms, and hedge funds. These entities typically acquire homes in bulk, often through all-cash offers, to convert them into rental units. Their acquisition strategy focuses on generating long-term rental income and benefiting from property appreciation.

Smaller corporate entities primarily consist of Limited Liability Companies (LLCs) and other similar structures. Many individual investors, including “mom-and-pop” landlords, utilize LLCs to hold their rental properties, even for a single unit. This structure offers asset protection by creating a legal separation between personal assets and business liabilities. Single-member LLCs often benefit from pass-through taxation, where income is reported on the owner’s personal tax return.

These smaller entities may pursue strategies ranging from long-term rental income to short-term flips, depending on market conditions and their financial goals. While large investors emerged after the 2008 financial crisis by purchasing foreclosed properties, smaller investors have consistently been a significant force in the rental market. The choice of entity structure often depends on the scale of investment, with larger portfolios frequently held by more complex corporate arrangements like REITs, which are required to distribute at least 90% of their taxable income to shareholders annually.

Geographic and Property Type Distribution

Corporate homeownership is not evenly distributed across the United States, with concentrations observed in specific regions and metropolitan areas. The Sun Belt region, encompassing states like Florida, Georgia, Arizona, Texas, and North Carolina, has seen substantial corporate acquisition activity. For example, institutional investors own a significant share of single-family rental homes in cities such as Atlanta, Jacksonville, and Charlotte, often exceeding 15% of the local market. Other cities like Phoenix, Las Vegas, Memphis, and Indianapolis also show high investor prevalence.

Corporate buyers frequently target entry-level single-family homes suitable for rental conversion. These properties often possess characteristics attractive to renters, such such as three bedrooms and two bathrooms, and may be located in good school districts. Investors also look for properties that can generate positive cash flow after accounting for expenses like property taxes, insurance, and maintenance. Some institutional investors focus on newer properties, while others acquire older housing stock in relatively affordable markets like Cleveland and Detroit, which may require renovation.

The preference for certain property types and locations allows corporate entities to achieve economies of scale in property management and maintenance. For instance, they might invest $15,000 to $39,000 on renovations for acquired properties before listing them for rent. This regional concentration and focus on specific property types influence local housing inventory and rental markets.

Data Collection and Reporting Challenges

Accurately measuring the percentage of U.S. homes owned by corporations presents several complexities, making a single, definitive number elusive. One primary challenge stems from the fragmented nature of property ownership data, which is maintained across various local and state registries rather than a centralized federal database. This decentralized system makes it difficult to compile a comprehensive national overview of ownership.

Another significant hurdle is the varying definitions of what constitutes “corporate” ownership. The term can encompass large institutional investors, such as REITs with thousands of properties, to small limited liability companies (LLCs) owned by individual “mom-and-pop” landlords who might own only one or two rental units. For instance, some studies define “large corporate landlords” as owning more than 15 properties, while others set the threshold at 100 or even 1,000 properties. This definitional inconsistency leads to widely divergent reported figures.

Furthermore, tracking beneficial ownership, or the true individual behind a corporate structure, adds another layer of complexity. Properties are often held by shell companies or intricate corporate structures, obscuring the ultimate owner. While recent regulations, such as the Corporate Transparency Act and Financial Crimes Enforcement Network (FinCEN) reporting requirements effective January 1, 2024, aim to increase transparency by requiring disclosure of beneficial owners, these measures are still in their early stages of implementation and compliance. Different methodologies employed by various research organizations also contribute to discrepancies in reported data, as each may use unique criteria or data sources.