The Growing Challenge of Home Affordability in San Diego and Across the U.S.

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Home affordability has become an urgent issue in San Diego, California, and throughout the United States. Soaring home prices, combined with rising mortgage rates, have made homeownership increasingly unattainable—especially for first-time buyers. However, a key but often overlooked factor exacerbating the crisis is the growing influence of Wall Street-backed Real Estate Investment Trusts (REITs).

San Diego, one of California’s most desirable cities, saw its median home price exceed $750,000 in 2023—far above the national average. Limited housing inventory, strong demand from tech and biotech professionals, and historically low interest rates over the past decade have contributed to this upward trend. However, institutional investors, particularly large REITs, have also played a significant role in driving prices higher. These firms, which oversee billions of dollars in real estate assets, frequently purchase single-family homes in bulk, outbidding local buyers with all-cash offers.

By acquiring properties in large quantities, REITs shrink the available inventory for individual buyers, forcing prices even higher. Additionally, as more homes are converted into rental properties, prospective homeowners face limited choices and escalating costs. For example, San Diego’s rental market has seen sharp increases, with one-bedroom apartments now averaging over $2,500 per month. As a result, many middle-class families find themselves renting for longer periods or relocating to more affordable areas.

Nationally, the influence of REITs is equally profound. These large investment firms continue acquiring homes at scale, further fueling the rise in median home prices across the country. Consequently, the dream of homeownership is slipping further out of reach for many Americans.

Recognizing this growing issue, policymakers and housing advocates are calling for greater regulations on institutional investors, aiming to restore balance and improve accessibility in the housing market. Until meaningful reforms take effect, the increasing dominance of Wall Street REITs will remain a significant challenge to affordability in cities like San Diego and beyond.

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