Single-Family REITs and Local Housing Markets

65 Pages Posted: 18 Jul 2024 Last revised: 4 Feb 2025

See all articles by Marco Giacoletti

Marco Giacoletti

Marshall School of Business

Rawley Heimer

Arizona State University (ASU) - W.P. Carey School of Business

Wenli Li

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Edison G. Yu

Federal Reserve Bank of Philadelphia

Date Written: February 04, 2025

Abstract

Institutional investors in single-family housing markets are often represented as worsening household well-being. We document the growth of single-family REITs (SFRs) and their (non-)effects on housing markets by constructing a novel dataset of SFRs’ underlying properties. SFRs purchase properties in neighborhoods encircling city centers, where housing supply is more elastic and with populations facing homeownership barriers. Using a spatial differences empirical strategy, SFR growth relates to increased housing supply, lower mortgage approval rates, and modest price increases. These findings likely capture SFRs’ selection of
neighborhoods rather than causal effects. SFR asset returns mirror representative housing portfolios despite their concentrated holdings.

Keywords: REITS, Institutional Investor, Housing Market

JEL Classification: R3, G23

Suggested Citation

Giacoletti, Marco and Heimer, Rawley and Li, Wenli and Yu, Edison G., Single-Family REITs and Local Housing Markets (February 04, 2025). Available at SSRN: https://ssrn.com/abstract=4895275 or http://dx.doi.org/10.2139/ssrn.4895275

Marco Giacoletti

Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

Rawley Heimer

Arizona State University (ASU) - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

Wenli Li

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States
215-574-3985 (Phone)

HOME PAGE: http://https://www.philadelphiafed.org/our-people/wenli-li

Edison G. Yu (Contact Author)

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

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