Institutional Investors May Own Up to 40% of U.S. Housing Stock by 2035, Yardi Matrix Analyst Says

Written by:

Rudi Davis

Date:

07 Feb 2026

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Doug Ressler, Manager of Business Intelligence at Yardi Matrix, reports that major real estate investment trusts (REITs) and other institutional investors are rapidly expanding their involvement in the U.S. housing market. Over the past seven years, these investors have moved well beyond traditional multifamily and single-family rentals, increasingly targeting manufactured housing and build-to-rent (BTR) communities as central components of their long-term portfolios.

This expansion is more significant than many market observers realize, Ressler says. Currently, institutional investors own about 12 percent of the total U.S. housing stock. While this share may appear modest, Ressler points to projections that suggest a much larger footprint is on the horizon.

“Institutional investments right now get a bad rap at times. But what we see is that right now, institutional investments across the U.S. for housing cover about twelve percent of the housing stock,” Ressler says. “However, if you listen to various prognosticators, it could be much higher. I think JP Morgan wrote a report three years ago that said it could be in the next ten years, between now and 2035, could be as much as forty percent of the housing market that is represented by BTRs or combination BTR manufactured housing.”

If these projections are realized, institutional investors would own or control nearly half of the nation’s housing stock within the next decade, fundamentally altering the landscape of home ownership and rental housing in the United States.

Origins: From the Financial Crisis to Strategic Expansion

Ressler traces the roots of this institutional surge back to the aftermath of the 2008 financial crisis. As foreclosures mounted and home values collapsed, large investors saw an opening to acquire distressed properties at scale. Their thesis was straightforward: professionally managed portfolios could outperform fragmented ownership by individual landlords.

“This really started back during the Great Financial Crisis, when many homes were lost to foreclosure,” Ressler explains. “By 2018, many large real estate investment trusts were saying, ‘There’s still a housing shortage, and we think we can manage costs a lot better than individual owners, because that’s what we do. That’s our claim to fame.'”

By 2018, this conviction had evolved into an active strategy. Major REITs began systematically adding manufactured housing and alternative models such as BTR communities to their investment plans. What started as tentative investments has since matured into a core focus, with significant capital now flowing into these sectors.

“Real estate investment trusts began to add this to their strategy in terms of institutional investment in private homes. And it has come to fruition, and continues to gain momentum,” Ressler says.

Why Institutions Are Doubling Down

The primary driver behind this institutional push, according to Ressler, is the ability to manage costs and achieve operational scale. Institutional landlords believe they can operate more efficiently than individuals, leveraging bulk purchasing, standardized maintenance, and data-driven management across large portfolios.

“Institutional investors have added to their strategy because they see it as a way of increasing the housing supply, managing cost, and at the same time providing housing stock to people in need,” Ressler says.

Manufactured housing, in particular, presents an attractive opportunity. Institutional capital views it as a way to serve populations priced out of traditional housing, while still achieving risk-adjusted returns that meet investor expectations.

Faith-Based Partnerships and Affordable Housing

Ressler notes a growing trend of partnerships between institutional investors and faith-based organizations, particularly in markets such as the Northeast. Many religious groups own underutilized land, often in high-demand areas, that can be leveraged for affordable housing development.

“What we see is a lot, especially in the Northeast, around New York City, New Jersey, a lot of faith-based organizations that own underutilized land. In other words, it could be dormant in terms of just vacant land, or it could have stock on it that is no longer being utilized,” Ressler explains. “These faith-based organizations are forming joint ventures with institutional investors to be able to build affordable housing.”

These projects require complex financial structuring that combines different types of loans, equity, and government incentives, such as Section 42 tax credits, to make development feasible.

“What we see, especially in affordability, is a lot of stacking of debt in the debt stack, debt and equity stack. In other words, you can’t go with one loan. Can’t go with Section 42 or anything similar. You have to really layer that with the various types of loans,” Ressler says.

The result is a growing network of mission-driven and institutional capital working together to address affordable housing needs, something neither group could accomplish on its own.

Impact on Smaller Investors and Developers

The influx of institutional capital presents both opportunities and challenges for smaller investors and developers. On the one hand, there are still markets and property types that are outside the immediate focus of large investors, creating opportunities for entrepreneurial activity. On the other hand, institutional players’ access to capital and operational scale creates significant competition.

Ressler observes that many smaller investors and faith-based organizations now turn to Yardi Matrix for data to help them underwrite deals and assess market viability. Access to accurate, consolidated market data has become essential for competing in an environment increasingly shaped by institutional strategies.

“A lot of times, they will come to us and say, ‘What are the metrics? How do I underwrite a loan? What does it look like in this particular area?” Ressler says. “And so that is the service that we provide to these folks, but we see it as growing in predominance.”

Looking Ahead

Whether institutional investors actually reach 40 percent market share by 2035 remains uncertain. However, the trend toward greater institutional ownership is evident. Manufactured housing and alternative rental models are no longer niche investments but are becoming central to significant portfolios.

This shift is changing how housing is owned, operated, and financed in the United States. As institutional capital continues to expand its reach, smaller investors, developers, and mission-driven organizations will need to adapt to a landscape where data, scale, and strategic partnerships increasingly determine success.