I can’t take it anymore…
I see data used and abused so often now, that I have to address it.
I. MYTH: Institutional Investors Are Pushing Up Single-Family Home Prices!
About 20% of America’s 86 million single-family homes are owned by investors, yes. BUT, the majority are owned by “mom-and-pop” landlords. ONLY 2.2% ARE OWNED BY LARGE INSTITUTIONAL INVESTORS.
II. MYTH: Immigrants Were Driving Up Home Prices With Subsidized FHA Financing!
This Instagram post tells us that those darn immigrants, without permanent residency, were responsible for pushing up home prices – with government subsidized FHA financing no less. And boy are we supposed to be mad.
But…it’s not true.
The post uses a misleading bar chart to make it look like the number of FHA-financed immigrant purchases absolutely plummeted when regulations put a stop to such purchases.
BUT, what we really see is only a 5% drop in the share of FHA loans locked by immigrants (from 6% of FHA loans to 1% of FHA loans).
And – only about 20% of all purchase mortgages are FHA financed – and 5% of 20% is 1%.
So – the actual impact of immigrants buying homes with FHA financing was negligible, representing about 1% of the financed purchase market.
III. MYTH: FHA Is Today’s Subprime – With Mass Foreclosures On The Horizon!
I frequently see posts about FHA becoming America’s new subprime crisis waiting to happen, particularly regarding down payment assistance loans that allow borrowers to buy a house with very little money out of pocket.
So, while I do love the focus on borrowers with no skin in the game, as that was a major cause of the 2008 crisis, the math doesn’t support the doom and gloom.
First, only about 20% of FHA loans involved government-sponsored down payment assistance loans – or about 4% of all purchase loans.
In contrast, subprime mortgages accounted for almost 20% of all loans in 2005 and 2006, and most of those loans had no down payment.
But – more importantly, FHA is markedly different from pre-2008 subprime for several reasons:
- FHA requires a full income verification and a job history. Subprime required a pulse.
- FHA requires owner-occupancy, while subprime allowed investors to buy homes with 100% financing.
- Most FHA financing requires a 3.5% down payment, while most subprime financing required 0% down.
IV. MYTH: Foreclosures Are Way Up!
CNBC’s Diana Olick published this headline a few weeks ago: “New foreclosures jump 20% in October, a Sign of More Distress In the Housing Market!”
BUT, we saw fewer than 200,000 foreclosures in 2025, less than 1/3 of the 600,000ish we saw in 2014 and 2015. And over 100,000 fewer than we saw as recently as 2019.
So yeah, we’re up 20% – from RECORD LOW LEVELS.
In conclusion – beware of math! Or bad math at least. And be especially cautious around bad math that keeps buyers on the sidelines.
