I did factor that in when I pointed out the average home purchasing age is 4 years older than the past. It does not mean millenials won't own homes, it is that they will buy them later in life. If they want to... we rent to many millenials that are very mobile and real estate does not fit a mobile lifestyle the transaction costs are to high.
I did not ignore that institutional investors are investing in real estate, I said the statistics suggest that their "net" buying is largely coming from small individual investors and not household owners based on the fact that the percentage of households that own their home has not changed. Sorry math is math... and we are both entitled to opinions, but not our own math.
REITs
You seem to be missing why real estate residential real estate became such "a hot investment" and why it won't be soon.
As a result of the Great Recession in 2008, interest rates dropped to record low levels and as a result CDs yield less than 1%. Many seniors that have money, but are scared of stocks, opted to invest in real esate.
As someone who is retired, when my 5% CDs matured and the renewal rates were 1-2%, and later they went even lower. I began to invest in these real estate funds. Then I began to buy the real estate directly.
In other words, those horrible institutional investors are investing the money of the parents and grandparents of the young people who you argue are being shutout of the housing market. And as those seniors are living longer, rather than their money being passed down to their children and grandchildren and used as downpayments on homes, they are indirectly becoming the landlords of young people who for many reasons are buying homes later in life including family formations occurring far later in life with more women pursuing careers before having children.
REITs are designed for individual investors not corporate investors. Here is a primer for you if you are not familiar with REITs.
That same low interest rates that made housing affordable to those that could come up with the downpayment also helped raise the returns on investing in real esate due to benefits of financial leverage.
The current rising interest rates have already begun to hurt housing prices. CD and bond interest rates compete with real estate investing. If they get high enough, real estate investing becomes less attractive. If mortgage rates stay above 6%, expect housing prices to drop another 10%.
You know you are not dealing with a bot, given the nature of my response. Anyway, your ideas would destroy the single biggest investment that seniors make to fund their retirement when they are young. And that would ultimately destroy a large portion of what they give to their children. In that sense, capping real estate prices would make real estate only attractive to institutional investors that can buy and hold and thus won't get killed by the transaction costs and capital gains tax you are proposing.
