The U.S. is facing a housing shortage crisis of historic proportions. According to a report from Freddie Mac, the U.S. is short more than 3.8 million housing units, leaving millions of Americans struggling to find affordable homes. Meanwhile, real estate professionals, who have a deep understanding of the market and property values, are often investing their retirement savings in traditional stock market assets, while opportunities in real estate remain largely untapped.
Bob Waun, co-founder of DIRT Realty and an outspoken advocate for real estate investment, believes that Realtors and small investors are missing a crucial opportunity by keeping their retirement savings locked in the stock market, particularly through large institutional players like BlackRock. Instead, Waun is a strong proponent of using Self-Directed IRAs (SDIRAs) to invest in real estate, which could unlock billions in new capital and provide a critical solution to the housing shortage.
"Realtors should be investing in real estate—not the stock market," says Waun. "It’s shocking that so many real estate professionals are putting their money in BlackRock and Wall Street when they could be using it to invest in housing. By leveraging self-directed IRAs, Realtors have the power to help solve the housing crisis while also building their own wealth."
How Self-Directed IRAs Can Address the Housing Shortage
A Self-Directed IRA (SDIRA) allows investors to go beyond traditional assets like stocks and bonds, giving them the flexibility to invest in alternative assets such as real estate, land, rental properties, and even private LLCs. Unlike conventional IRAs, which are often restricted to paper assets, SDIRAs give account holders control over where their money goes, providing a powerful tool for those interested in real estate.
According to the National Association of Realtors (NAR), there are over 1.5 million active Realtors in the U.S. If each Realtor invested just $10,000 of their retirement savings into real estate through an SDIRA, it would result in $15 billionof new capital that could be injected into the housing market. This infusion of investment could be used to build affordable housing, renovate existing properties, or purchase rental homes, all of which would help ease the housing shortage.
Imagine the impact of $15 billion being directly invested into housing—whether through new construction, renovation, or acquisition of distressed properties. This could create hundreds of thousands of new homes, rejuvenate underdeveloped neighborhoods, and provide much-needed affordable housing options across the country.
“Unlocking that $15 billion from self-directed IRAs would have a transformative effect on the housing market,” Waun explains. “It’s one of the most effective ways to both tackle the housing crisis and empower small investors to take control of their retirement savings.”
Why Realtors Should Invest in Real Estate, Not the Stock Market
Despite being real estate experts, many Realtors still invest their retirement savings in traditional stock market assets, often managed by institutional giants like BlackRock. Waun believes this is a missed opportunity and advocates for real estate professionals to leverage their expertise by investing in properties through SDIRAs.
“When real estate professionals put their money in the stock market, they’re giving up control to Wall Street. But real estate is what they know best,” says Waun. “By investing in real estate through self-directed IRAs, they can leverage their knowledge and connections to generate returns that are both financially rewarding and socially impactful.”
The U.S. housing shortage is not just an economic issue—it’s a societal one. By encouraging Realtors and real estate professionals to invest their IRA funds into housing-related projects, there’s a chance to both address the crisis and generate substantial returns. Real estate has historically provided steady income streams and long-term appreciation, making it an ideal choice for retirement investing, especially in a tight housing market.
The Financial Power of $15 Billion in Real Estate Investments
The housing shortage crisis is largely driven by a lack of supply, and solving this issue requires large-scale investment in new construction and property development. According to the National Low Income Housing Coalition, over 7 million affordable rental units are needed just to meet demand from low-income renters. This gap can only be filled through sustained investment in housing infrastructure.
If Realtors across the country redirected even a small portion of their retirement savings into real estate through SDIRAs, it would provide a massive infusion of capital. Here’s a look at how $15 billion in new investment could impact the housing market:
Affordable Housing Development: With an average cost of $150,000 to build a new affordable housing unit, $15 billion could fund the construction of 100,000 new homes.
Revitalizing Neighborhoods: Many urban areas have large swaths of distressed properties. SDIRA funds could be used to purchase and rehabilitate these homes, turning vacant lots into vibrant communities.
Rental Housing: Investing in rental properties through SDIRAs provides not only housing solutions but also generates steady rental income for the investors. With the demand for rentals on the rise, this is a sound financial strategy.
"Real estate investment isn't just about making money—it's about solving problems," says Waun. "The housing shortage is a massive issue, and we can use self-directed IRAs to help fix it, while also creating wealth for small investors. It's a win-win."
SDIRAs: Empowering Investors to Take Action
Opening a self-directed IRA is simpler than most people think, especially with providers like uDirect IRA guiding the process. By rolling over funds from a traditional IRA or 401(k), investors can diversify their retirement portfolios into real estate, land, and other alternative investments that offer long-term appreciation and steady income.
The key benefits of investing through an SDIRA include:
Tax Advantages: Like traditional IRAs, income and gains from real estate investments in an SDIRA grow either tax-deferred or tax-free, depending on whether the account is a traditional or Roth IRA.
Greater Control: SDIRAs allow individuals to have direct control over their investments, providing the flexibility to choose real estate, land, rental homes, and other property types.
Wealth Creation: Real estate has consistently provided returns through appreciation and rental income, offering a solid path to building wealth over time.
Realtors and investors who understand real estate are in a unique position to capitalize on this opportunity. By promoting SDIRAs to their clients, real estate professionals can unlock new streams of capital and play a key role in addressing the housing shortage.
A Call to Action for Realtors
As the U.S. housing shortage continues to deepen, the need for creative solutions and new sources of investment is critical. Bob Waun believes Realtors have a duty to not only advocate for self-directed IRAs as a smart retirement strategy but also as a powerful tool for solving the housing crisis.
"Realtors need to start thinking about the bigger picture," Waun concludes. "By investing in real estate through SDIRAs, they can contribute to fixing the housing shortage, grow their retirement savings, and help build stronger communities. This is how we solve problems—not by relying on Wall Street but by investing in the world around us."
The time is now for Realtors and investors to harness the power of self-directed IRAs to unlock billions of dollars in new housing investment, providing solutions to the country’s most pressing housing challenges while building wealth for future generations.
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