President Donald Trump and California Gov. Gavin Newson don’t agree on much.
But they point fingers in the same direction over what has been contributing to higher home prices and hurting hardworking Americans – and Californians – from achieving the dream of homeownership.
Both businessmen-turned-politicians blame institutional investors. You know, like BlackRock’s Invitation Homes, which owns about 11,500 homes in California, according to the latest data.
The president and governor claim the massive companies are buying homes for top dollar – often competing against everyday folks – and then demanding higher-than-average market-rate rent. They say institutional investors add dollars on both sides of the housing market, from those looking to buy and households needing to rent.
“Institutional investors snatching up homes by the hundreds and thousands at a time, crushing the dream of home ownership, and forcing rents too damn high for everyone else,” Newsom said in the State of the State address in January. “It’s shameful that we allow private equity firms in Manhattan to become the biggest landlords in many of our cities. Over the next few weeks, we will work with the Legislature to combat this monopolistic behavior, strengthen accountability, and level the playing field for working families. That means more oversight and enforcement, and potentially changing the state tax code to make this work.”
WARNING: FIGURES AHEAD
But how much do institutional investors affect home prices, rent and the market overall?
Well, it depends. A lot. On the community and the definition of institutional investors.
Large institutional investors – defined as firms with at least 1,000 homes in California – own only about 1% of the single-family homes in the state. They control about 3% of the homes for lease in the state.
But here is where definitions are important.
Corporate and large-scale investors – investors with at least 10 homes in California, including Wall Street giants such as BlackRock – control 19% of the single-family rentals in the state.
But if you crunch the data a little more, small mom-and-pop owners – those with five or fewer rentals – own a larger part of the rental supply in California, some housing experts say as much as 90%.
% of homes bought by investors in 2025
- Bakersfield: 5.8%
- Fresno: 6.6%
- Los Angeles: 5.4%
- Riverside: 5.4%
- Sacramento: 5.3%
- San Diego: 4.8%
- San Francisco: 3.9%
- San Jose: 6.0%
Source: ATTOM Data
Big companies buying homes is real. Just not on the grand scale the governor and the president say.
Statewide, institutional investors accounted for 5.5% of home purchases in 2025, according to ATTOM Data (see table, right).
WILL BANNING BIG COMPANIES FROM BUYING HOMES HAVE A HUGE IMPACT? IT DEPENDS
So, banning institutional investors from owning rental homes will have an effect in some markets, but little, if any, elsewhere.
For example, there are several counties where corporate investors — again those with 10 or more rentals — have a much-larger percentage of the market. Fresno and the Inland Empire (Riverside and San Bernardino counties) have almost 70,000 homes combined (see list), the highest percentage of institutional investors in the state.
In those communities, corporate investors have a much-larger role on prices and rents. In comparison, institutional investors own about 72,000 homes in Los Angeles County.
It should be noted that in smaller counties, like Del Norte and Mono, corporate investors may control 75%-plus of the rental markets. But these are often-short-term properties for airbnb and VRBO.
Counties with the largest percentage of corporate owners
- San Bernardino: 29,200 homes
- Riverside: 23,200 homes
- Fresno: 16,400
- Sacramento: 15,400
Source: Various sources
The nonprofit news organization CalMatters shares additional details on the topic of institutional investors from Gov. Newsom’s State of the State speech in January.
Feature photos: The legendary bull statue on Wall Street in New York City.
Equity is dipping and seriously underwater mortgages are increasing as more homeowners struggle. ADOBE STOCK
More homeowners waking up to late notices and negative equity
Little moves can mean a lot.
Mortgage rates. Home Prices. Homes on the market.
Here are a few more to consider: the number of homeowners late on their home-loan payments, those seriously underwater on their mortgage, and a slight drop in the percentage of equity-rich owners.
Coupled with a bump in foreclosure notices announced a few weeks ago – again, a very small increase – the market seems to be staggering.
THREE MONTHS AND COUNTING
VantageScore, a payment-tracking firm, detailed that 0.20% of homeowners were at least 90 days (yes, three months) late on their mortgage payments in December. Not a huge deal, but it’s a newsworthy increase from 0.17% in December 2024. (Small numbers, until you look at the annual percentage gain of almost 18%.)
ATTOM Data reported that 1.7% of homeowners in California with a mortgage are seriously underwater – the current value of their home is 25% less than the money owed – during the fourth quarter, compared to 1.3% a year ago. (The percentage increase is 31% over the past year.)
You’re 1 in 40 million
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Of course, as home prices dip, the number of equity-rich homeowners – those with more equity than debt on the property – slips as well. Statewide, about 53% of homeowners are considered equity rich, down from 57.7% a year ago (see table, below), according to ATTOM Data.
All eight metro markets, from the Bay Area and the Sacramento region to San Diego, reported a decline in the percentage of equity-rich homeowners and an increase in seriously underwater mortgages. Fresno and Sacramento have the largest percent of seriously underwater mortgages at 2%.
‘A HOUSING MARKET THAT IS STABILIZING RATHER THAN OVERHEATING’
Nationwide, 44.6% of homeowners with mortgages were equity rich during the fourth quarter, down from the peak of 49% in second-quarter 2024. The current figure is the lowest share of equity rich properties in four years.
ATTOM reports 3% of homes are seriously underwater nationwide, almost double the rate in California.
Again, it’s far from the sky is falling – nowhere near the massive storm during the Great Recession – but worth watching.
Or maybe the “numbers suggest a housing market that is stabilizing rather than overheating, giving homeowners a solid financial foundation while allowing for healthier market dynamics,” said Rob Barber, CEO of ATTOM. “After years of rapid gains, homeowner equity is settling into a more sustainable range, and that’s not a negative sign for the market.”
Maybe. Or maybe it’s just bad for homeowners looking to sell.
| City | Equity rich owners Q4 2025 | Equity rich owners Q4 2024 | Mortgages seriously underwater Q4 2025 | Mortgages seriously underwater Q4 2024 |
|---|---|---|---|---|
| California | 53.3% | 57.7% | 1.7% | 1.3% |
| Bakersfield | 40.6% | 44.4% | 1.9% | 1.7% |
| Fresno | 46.0% | 48.7% | 2.0% | 2.0% |
| Los Angeles | 59.6% | 64.0% | 1.4% | 1.1% |
| Riverside | 47.5% | 51.7% | 1.6% | 1.4% |
| Sacramento | 43.0% | 47.8% | 2.0% | 1.6% |
| San Diego | 58.7% | 63.4% | 1.2% | 0.9% |
| San Francisco | 54.8% | 59.4% | 1.8% | 1.4% |
| San Jose | 65.3% | 68.5% | 0.8% | 0.6% |
Source: ATTOM Data
Buyers are in the driver’s seat, as more sellers are discounting prices. ADOBE STOCK
Majority of buyers are saying let’s make a deal – and getting discounts
Buyers are embracing the fast-changing housing market, where there are more sellers than shoppers. In some communities, a lot more.
More than half of homes (52.5%) sold in 2025 were below the listing price in California, the largest percentage since 2012, when the housing market was recovering from the Great Recession, according to Redfin.
Those buyers enjoyed an average discount of 6.5% statewide, greatly increasing affordability and monthly payments. The discounts could be a price cut, helping with closing costs, paying points for mortgages or money for repairs.
Sacramento, Riverside and Anaheim had the largest percentage of home-sellers that lowered prices (see table, below) near 60%. The Bay Area had the fewest homes that sold with price cuts under 40%.
‘BUYERS SHOULDN’T WRITE OFF HOMES THAT ARE SLIGHTLY ABOVE THEIR BUDGET’
The state – still one of the most competitive housing markets in the nation – was a bit more challenging for buyers than those nationwide, where 62.2% of homes sold at a discount. The average buyer with a below-market deal had a 7.9% discount on the price.
With the current discounts, home shoppers have more buying – and negotiating – power.
“Homebuyers in 2026 shouldn’t write off homes that are slightly above their budget because there’s a good chance that they’ll get some sort of concession from the seller, be it a price cut, money toward closing costs or funds for repairs,” said Redfin senior economist Asad Khan. “This marks a reversal from the pandemic home buying frenzy, when house hunters were advised to search for homes below their budget because fierce bidding wars were causing properties to sell far above the asking price.”
| City | % of homes sold below listing price | Average discount for homes sold below the listing price |
|---|---|---|
| Anaheim | 59.2% | 6.0% |
| Los Angeles | 54.9% | 6.9% |
| Oakland | 46.9% | 6.5% |
| Riverside | 60.6% | 6.6% |
| Sacramento | 61.2% | 6.2% |
| San Diego | 58.9% | 6.1% |
| San Francisco | 38.9% | 7.4% |
| San Jose | 39.3% | 6.0% |
| California | 52.5% | 6.5% |
Please note: California percentage rates are an aggregate of the eight cities.
Source: Redfin
Everyone lives in an HOA, right? Not so fast. There are plenty of homes in the state without HOA fees. ADOBE STOCK
Beyond the gate: California has fewer HOAs than the national average
Perception is not reality. At least in California.
Seems like almost every home listed in California on Redfin and Zillow is in a master-planned community – and part of a homeowner’s association (HOA). You know, those fees that can add hundreds of dollars to the monthly mortgage payment and rules that make no sense (sure, I can throw a birthday bash, but everyone needs to arrive via ride sharing because on-street parking is banned).
But fewer than two of every five (39%) of homes listed are in HOAs in California, according to Realtor.com.
Neighboring Nevada has the largest percentage of HOAs at 68%, primarily because of Las Vegas and Reno-Sparks, followed by Arizona at 65%. Almost two of every three homes in Florida are part of an HOA.
Nationwide, 44% of homes on the market were in HOAs in 2025, compared to 34% in 2019. Yep, California has a lower percentage of homes in HOAs than the nation.
MIAMI (NOT SO) NICE
California, where master-planned communities gained a foothold, doesn’t even have a city on the national list.
Six of the 10 cities with the highest HOA fees were in Florida, with first-place Miami-Fort Lauderdale leading the way at $615 per month – or 27% of the monthly mortgage payment.
Also, something to brag a bit about – California may have some of the highest home prices in the nation, but the state has some of the lowest HOA fees (scroll down the blog), according to another report previously shared. The statewide average is $278.
