What's Really Driving Today's Housing Costs

If you’ve scrolled through social media lately, you’ve probably seen plenty of blame aimed at real estate investors for today’s high home prices. But while that theory is popular, the data tells a different story.

A national survey found nearly half of Americans (48%) believe investors are the main reason homes are so expensive. However, Realtor.com reports that only 2.8% of all home purchases last year were made by large investors — those who own more than 50 properties. That means 97% of homes were bought and sold by everyday buyers and sellers, not corporations.

As Danielle Hale, Chief Economist at Realtor.com, explains, “Investors do own significant shares of the housing stock in some neighborhoods, but nationwide, the share of investor-owned housing is not a major concern.”

So, what’s really driving home prices? The simple answer is supply and demand. According to Robert Dietz, Chief Economist at the National Association of Home Builders, “The fundamental driver of housing costs is the shortage itself.”

There just haven’t been enough homes built or listed to keep up with demand, particularly in sought-after coastal regions like Miami, Key Largo, and the Florida Keys. That ongoing shortage — not investor activity — is what continues to keep prices elevated.

As more new listings and construction projects come to market, experts expect gradual relief ahead. Realtors with The Selling Properties Group powered by LPT Realty are helping buyers and sellers navigate these trends with insight into the evolving South Florida market.