MY TURN: Housing as a commodity

Should housing be considered as a key investment in safe shelter for families who will benefit our community or should it be considered as an asset class for absentee investors? That is a relevant question, since the Wall Street Journal recently reported that nearly one third of all single-family homes sold this year were purchased by investors. Financial syndicates scooping up homes that would otherwise be occupied by growing families who will support our schools and add to the fabric of our communities. 

Young families seeking to purchase a home are already burdened by high mortgage rates, tighter lending standards and elevated prices. Now, they are competing for available homes against deep-pocket companies representing absent investors who are seeking only profit.  

Historically, high mortgage rates and tighter lending standards reduce buyer demand and result in a lowering of home prices, as sale volume declines. That is not happening. Why? Because investor demand, fueled by capital markets looking for yield, is continuing to push up prices and distort the market. Homes are being increasingly viewed and traded as a commodity or investment vehicle rather than a place for shelter. 

When housing prices are supported not by end-user demand, but by capital markets looking for yield, housing stops functioning as shelter and starts functioning as an asset class. And when the entry-level home is treated like a financial product, working families can’t compete. They’re not just losing bidding wars, they’re losing access to home ownership, and our community is losing a key portion of what makes it viable, livable and, functioning. 

Since 2020, home prices have increased more than 50% and half of those renting in the U.S. are cost burdened — paying over 30% if their income for rent. 

The solution? There are lots of potential changes that could help, but many of them will require political courage, including a review of local zoning and density restrictions, state and federal housing assistance programs and a reconsideration of our stance on growth. 

A key question, we should all be asking at the congressional level: Should investors be allowed to impact the housing market in this manner? Is the financialization of shelter by investors helping or hurting our communities and our economy? 

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Len Crosby is a Post Falls resident.