That sounds right. But so what? It’s like there’s this idea that if only Blackrock would go away all these homes would suddenly drop in price. The argument is that they’re overbidding for homes. Why would they do that? The point is to maximize ROI, and you don’t do that by paying above market for an asset.
If anything they’re more constrained. Blackrock buys houses using a formula, not emotion. Blackrock doesn’t bid $50K over asking like private buyers do because they absolutely looooooove the neighborhood or whatever. And this goes for all investors.
For my personal home, I got into a bidding war. Well not so much I, more like we, IYKWIM. I think we paid $70K over asking when it was all said and done. Because we went on emotion, not on hard data. It was during the height of the 2020 insanity and we jumped right in because it was the perfect home in the perfect neighborhood and all that bullshit. Eh whatever, house is worth $500K more today. But it could easily have blown up in our face.
But I’ve never done that with investment properties. I’ve bid on probably 30 homes that I never ended up buying. Because for investment homes I buy as cheap as possible to make the ROI I’m looking for. If I can’t buy it for what I want, I move one. No emotion, no letter to the owner telling them how I’ll take care of the pet squirrel
This is a good example of why the market is so bad for FTHB and people getting duped to move to LCOL areas for housing. You’re not the first person and won’t be the last to find some random “seemingly cheap” houses in areas that are decent on face value. Someone tried to do that here with Cleveland recently for some cheap houses in the hood.
I know nothing about many of these local markets, but it only takes ~ 30 secs of reading a listing to see why that “good deal” isn’t actually that good:
Low rating schools
Close proximity to something negative (train tracks, high crime area, etc.)
No nearby industry for jobs that could support paying the mortgage
House is the only remodeled one on the street and sticks out like a sore thumb.
Technically in the desirable city, but far outskirts of town.
Terrible layout or extremely small
Listed for an excessive period of time
It just reminds me of those really nice new construction places in Texas that flood my feed, but then you look them up and they’re hugging the boarder or 2 hours from civilization.
I just closed a refi with refi.com on a 30 year fixed with no points/fees outside of standard title work. The rate was 5.625%. I think rates have moved up a touch, but they are somewhat new after switching from Paddio, and I think they’re aggressively pricing against the market to get marketshare.
BlackRock does not buy single family homes. You might be confusing them with Blackstone.
Nonetheless, Large institutional investors (those with portfolios of 1,000+ homes) own less than 1% of the US homes.
Large institutional investors have minimal impact on housing unaffordability.
Inflation driven by government spending and money printing, coupled with difficulty in constructing new homes due to government regulations, is mostly responsible for rising house prices.
It’s the price during covid vs now. I’ve seen houses in my area which was $600-700k during covid with 2.5-3% mortgage rate is now selling for $1-1.1M with current mortgage rate.
Now imagine a 50 year mortgage being available. “They” can’t do anything about the 10 year yield without economic devastation to lower mortgage rates. If mid terms are important to them, they’ll rapidly green light it. If you can’t fix the rate, you’ll fix the payment. Just like the 84 month auto loan, it will be eaten up.
That said, it’s pretty hard to argue with the old school “0% for 72m” deals from back in the day especially if you could also get a significant amount knocked off the purchase price.
Blackstone was buying alot back in 2008, Blackrock doesn’t “buy” homes directly but rather it owns subsidies with residential real estate portfolios. For me, ANY institutional investor should not be allowed to compete with average citizens on buying residential homes. That just my opinion. Other may disagree with me and that’s fine. And of course there are MANY reasons for the affordability issue. Low rates, Fed, Covid, bubble of 2006-2008, builders, growing populations, supply and demand. MANY. My point was before we roll out a 50 yr mortgage why not tackle other facets of the issue as well.
My favorite stat is more new homes were built from 1970-1979 than were built from 2010-2019 and the population (1970 to 2010) was up 100 million people in the US!!!
Without going into an exhaustive explanation, I anticipate the 50 year mortgage will only be 25bps higher than the 30 year.
Fine, I’ll nerd out a little bit.
Lenders don’t have a liquid 50 year treasury to hedge against. They’ll price and hedge 50 year mortgages using the same instruments they use for the 30 for a 25bps-ish premium.
I continue to be amazed that when there is talk about people not being able to afford a SFH that the tax issue doesn’t come up more often as to mortgage interest being deductible and the SALT limit being raised to $40k.
While the S and M deductions are rising for 2026, in most markets you would be hard pressed not to do better or at least subsidze your purchase from a tax standpoint by getting into a house you can afford and are happy with (and will appreciate) when you have a decent-sized mortgage and property taxes (SALT), and even more so if you are paying state income tax (SALT again), have charitable expenses, investment expenses (look to changes for 2026), child care/credits, etc.
I think a lot of people are just unaware of what tax breaks are out there even if you are not some super high earner with a CPA or tax attorney doing your returns.
15-year mortgage @ 5.25% APR
30-year mortgage @ 6.00% APR
50-year mortgage @ 6.75% APR