Investment groups are buying properties to rent them out. As demand for housing is still increasing, one effect is a limited housing inventory for people looking to purchase their first home. They’ll be stuck renting with ever-inflating purchase prices and interest rates, with no escape.
There are a number of Federal and state programs out there aimed at helping these people buy a first home. When I was shopping for a home last year I came across some for as little as 3% down. For a $500,000 home (hardly a starter home in most markets), that's a down payment of just $15,000. Even if you add in lender fees and closing costs you're looking at less than $35,000 in up-front expenses for the buyer. I'd make the case that someone who doesn't have $35,000 available in liquid assets has no business owning a home at all.
I think the bigger issue is that too many buyers in the market for a first home are already saddled with a lot of other expenses -- including college debt. When you add the outrageous property taxes in many large metro areas, what you'll probably find is that these buyers can barely make ends meet even BEFORE they account for housing costs.