Institutional investors have become major players in the U.S. single-family housing market since the Great Financial Crisis. While existing work emphasizes market power, this paper proposes a revaluation mechanism based on heterogeneous exposure to housing risk. Using transaction-level data, I show that institutional entry persistently raises local house prices, lowers rental yields, and institutions pay more than households for identical properties. I develop a model in which households face both local and aggregate risk, while institutions face only aggregate risk because of diversification. As a result, institutions have lower risk premia, higher valuations, and lower borrowing costs. Consistent with this mechanism and supported by the data, price dispersion falls, and securitization costs undercut mortgage costs.