Is the American Dream Over or Just Changing?
Quick Take: Homeownership is shifting as builders turn to rentals and Wall Street invests big. What this means for LA homeowners and how to plan ahead.
The American Dream has always been rooted in homeownership. But with Wall Street buying entire neighborhoods and builders pivoting from selling to renting, we’re entering a new era. The question isn’t whether the dream is dead, it’s how it’s being redefined, and what that means for Los Angeles homeowners.
Table Of Contents
The Shift No One’s Talking About
Warren Buffett’s Berkshire Hathaway recently invested nearly $1 billion into Lennar and D.R. Horton. These builders aren’t just constructing homes to sell anymore - they’re becoming the country’s largest landlords. The build-to-rent sector has surged by 270% since 2019, and occupancy rates hover near 97%. Why? Because renting now delivers stronger, steadier cashflow than selling.
Lennar and D.R. Horton together control over 350,000 rental homes nationwide.
D.R. Horton has built more than 14,000 rentals, often selling entire neighborhoods to Wall Street funds.
Lennar partnered with Invitation Homes in a $4 billion venture to expand rentals further.
Average build-to-rent homes lease for $2,181 per month, often at a 10-40% premium over apartments.
Builders have figured out what Wall Street already knew: cashflow beats ownership. And the implications are massive.
What This Means for LA Homeowners
Los Angeles is ground zero for the affordability paradox. With median monthly payments near $5,900, renting often costs half as much as owning. That dynamic reshapes decisions for every homeowner:
Upsizing stalls, trading equity for higher payments feels irrational.
Downsizing backfires, smaller often costs more per month.
Rightsizing stalls, the math doesn’t line up, so people stay put.
When everyone waits, the market freezes. Meanwhile, institutions keep moving, buying in bulk, renting at scale, and refusing to drop prices.
The Bigger Theory
How does this gridlock resolve? History shows few options:
Wages surge, unlikely, since affordability would require minimum wage at $66/hour.
Costs roll back, but when has LA ever gotten cheaper?
Supply floods in, possible, but increasingly controlled by institutions who rent back at a premium.
This is the future Berkshire is betting on: homeownership shifting from independence to subscription living.
If Buffett believes home prices have bottomed out, then waiting for a crash may mean waiting forever. For Los Angeles homeowners, the danger is clear: your equity could stagnate while the market shifts to prioritize rental cashflow over family ownership. By the time you decide to move, you may find yourself competing not with neighbors, but with Wall Street itself.
What to Do About It
Smart homeowners aren’t waiting for a bounce that may never come. They’re taking action now:
Auditing timelines against realistic buyer demand.
Fixing presentation gaps to stand out when buyers do act.
Modeling multiple paths: sell-to-buy, rent-then-buy, or renovate-to-sell.
The winning move isn’t speculation, it’s strategy aligned with today’s market reality.
FAQs
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No. It’s not dead, it’s being reshaped. Ownership is shifting into a hybrid model where institutions own more homes and families compete with Wall Street for access.
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Because cashflow from rentals is more profitable and predictable than one-time sales. High demand and limited affordability make renting a safer bet.
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It stalls traditional moves, upsizing, downsizing, rightsizing, because the math doesn’t make sense. At the same time, it pressures equity as institutions set new market norms.
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Evaluate timelines, improve presentation, and consider multiple strategies. Acting with a plan beats waiting for uncertain conditions.
Ready to plot your board?
Book a 20-minute strategy call . We’ll map your current squares, identify untapped equity, and design a cash-flow plan that fits your timeline - no pressure, just clarity.