Single-Family REITs and Local Housing Markets

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