In an interview on The Breakfast Radio, Robert F. Kennedy Jr. shared his views on his 2024 presidential run, reparations, inflation, and the housing crisis in America, among many other topics.
His comments about the big corporations causing the housing crisis and affecting young Americans’ chances of buying an affordable home caught significant attention.
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“There’s three giant corporations, BlackRock, State Street, and Vanguard, which collectively own each other, so it’s really one giant corporation, but they also own 89% of the S&P 500. They own everything, and they’ve now decided to buy every single-family home in America, so if they stay on the current trajectory, they will own 60% of the homes in this country single-family homes by 2030. They literally are trying to buy everything,” said RFK Jr.
His words align with what Vivek Ramaswamy, a former presidential hopeful, said. In a post on X, he stated, “BlackRock, State Street, & Vanguard represent arguably the most powerful cartel in human history: they're the largest shareholders of nearly every major public company (even of each other).”
But are RFK Jr. and Ramaswamy right? Do these three big corporations own that much of the S&P 500?
According to Business Insider, their arguments can be traced to the academic paper from 2017 titled “Hidden power of the Big Three? Passive index funds, re-concentration of corporate ownership, and new financial risk.”
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The researchers state that BlackRock, State Street, and Vanguard are the largest shareholders in 88 percent of S&P 500 firms.
In conclusion, the researchers write that since 2008, there has been a substantial shift from active to passive investment strategies. BlackRock, Vanguard, and State Street now dominate this passive investing market. Together, they are the largest shareholders in 40% of all U.S. companies and 88% of the S&P 500 companies and are de facto permanent governing boards for over 40% of all listed U.S. corporations.
And what about RFK Jr.’s claims that they might own 60% of single-family homes in America?
While BlackRock, Vanguard, and State Street have considerable influence in the financial markets and are influential investors in different sectors, their direct involvement in buying single-family homes is relatively limited. BlackRock, for instance, stated that it doesn’t buy individual single-family homes but invests in mortgage securities and financing for new housing construction to add to the housing supply.
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Nevertheless, there is some truth to the concern because private equity firms and other large investors have been purchasing single-family homes, particularly during the 2008 financial crisis. These corporations often buy homes in bulk, sometimes outbidding individual buyers, which can drive up prices and reduce the availability of homes for regular families.
Additionally, according to a Redfin report, investors bought 26% of affordable homes in the U.S. during the last part of 2023. This makes it harder for regular buyers, who are already struggling with low availability, rising prices, and high interest rates.
As NBC News reported in 2021, owners are selling their houses to the highest bidders, and that's often out-of-state investors — “They don’t sell to people looking to live there.”
If he becomes president, Kennedy plans to create a federal program that offers mortgages at a 3% interest rate, funded by tax-free bonds. These low-interest mortgages would only be available to individuals, not corporations.
“This will drop mortgage payments by more than $1,000 a month for a median-priced home and allow your children to out-compete BlackRock in the market,” he said.
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