The Pandemic Housing Boom saw a flood of institutional homebuying. Low interest rates, easy access to capital, soaring rents, and skyrocketing home values were just too good a deal for Wall Street types like Blackstone and iBuyer players like Opendoor Technologies to pass on. However, it seems that institutional homebuyers are pulling back. According to an analysis conducted by John Burns Research and Consulting, institutional investors — those owning over 1,000 homes — bought 90% fewer homes in January and February than they did in the first two months of 2022. Invitation Homes, the largest owner of U.S. single-family rental homes recently became a net seller. In the first quarter of 2023, Invitation Homes bought 194 homes while it sold off 297.

In this episode of The Higher Standard, Chris and Saied examine this news and determine the effect it will have on the economy as a whole.

They discuss the reasons that banks are going to choose to be strategic in the deployment of capital, partially because they want to keep as much of their balance sheets as possible, in case of a run on deposits, and partially because any loan they make today is going to be underwater if the Federal Reserve continues to increase rates.

Chris and Saied look at news that shares of San Francisco-based PacWest Bancorp plunged after investors learned the regional bank was considering a sale. Despite thet fact that the bank has said it had not experienced a high number of customer withdrawals, the news still stoked fears of a potential surge in withdrawals among regional banks.

They also offer some thoughts on the results of a survey from the National Federation of Independent Businesses (NFIB), a lobbying organization that represents small business owners nationwide, which shows that small business earnings rose to the highest levels in at least 45 years last month.

Join Chris and Saied for this fascinating and informative conversation.

Enjoy!

What You’ll Learn in this Show:

• Why the market is not concerned with interest rate increases.
• Why the US dollar needs to be the world's currency.
• Why the debt ceiling is going to have to be raised well before June 1.
• Why, in 2011, the debt ceiling crisis led to an S&P downgrade of US sovereign debt.
• And so much more...

Resources:

Wall Street is running away from the housing market. But why?

Powell’s Bet Against Recession Looks Good — Minus the Credit Crunch and a DC Standoff

Fed report shows banks worried about conditions ahead, with focus on slowing economy and deposit outflows

Outlook for household spending slumped in April, New York Fed survey shows

Corporate Stock Buybacks Help Keep Market Afloat

What are the advantages of being the Nation that has the Reserve Currency

The Kardashev Scale - Type I, II, III, IV & V Civilization

Job growth totals 253,000 in April, beating expectations even as the U.S. economy slows