Why We're Here

The team at Homebase understands that real estate is a great way for people to build wealth, which is why our mission is to democratize access to real estate investing and empower the next generation of homeowners. We plan on doing that by tackling three problems facing the industry today:

  • Housing Affordability

  • Friction in Transactions

  • Opacity of Housing Data

Housing Affordability

Real estate has historically been a great asset class to invest in as it steadily appreciates over time and provides monthly cash flow through rents. A 2018 analysis by Laurie Goodman and Christopher Meyer calculated the relative financial returns of buying a house compared to renting in 2002. They found that, over the last 20 years, home ownership has been a better performing asset than bonds, the S&P500 and even investing in a public apartment ownership REIT, or real estate investment trust.

In tandem, housing affordability is the lowest it’s ever been, and is only projected to get worse. As interest rates climb, the buying power of individuals drops which in turn shrinks the pool of new prospective homebuyers. This leads would-be homebuyers to become renters instead, barring them from benefits of homeownership. This divide is even more drastic in urban cities where 60%+ of the population rents. In fact, according to a survey by the New York Times, the percentage of first time homebuyers is now 26%, down from the historic average of 40%, and the lowest it has been since the survey began in 1981. With no equity in the homes that they live in, renters are trapped in a perpetual cycle of increasing rent payments and zero equity ownership. In 2022, rents increased 4x faster than income.

Friction in Transactions

The process of buying and selling real estate today is full of friction. Transactions can take months to close, still often require signing physical paperwork that needs to be mailed or faxed, require working with multiple third parties and can cost you tens of thousands of dollars in fees. On top of that, in the age of the internet, many counties across the United States still require you to sign and transfer the deed of a home in-person and register it with the local county’s office. This makes the entire process inefficient and ultimately ends up costing the end consumer more. For example, bank inefficiencies in how they securitize mortgages leads to an additional 100 basis points in the cost of your loan. This might seem small, but even a 0.50% interest rate reduction on a $500,000 mortgage saves $2,500 per year of post-tax salary.

Opacity of Housing Data

In our current system, housing data is fragmented and siloed. Third-party institutions create walled gardens around their own proprietary data and force prospective home buyers to pay for access to that data. These companies have a vested interest in keeping the status quo of obfuscated real estate data. This includes your local title companies, real estate data brokers, and banks. Often, only large institutional investors have the means to pay for this data access. This results in institutional investors having much broader and accurate data vs. your local investor, and leads to them making better informed investment decisions.

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