In
2010 it was viewed as a quick way to make a buck, but Wall Street’s investment
in single-family rental housing soon became a distinct asset class and the
pandemic has encouraged its expansion. While the inventory of available homes
for sale has shrunk to historic lows, institutional investors are not only
gobbling up existing homes, they are beginning to buy new homes and build to
rent. The newest wrinkle is the entry of major new home builders into the
market.

The Great
Recession purchases of distressed homes by hedge funds (Blackstone was probably
the first) was welcome at the time. They relieved lenders of the burden of many
foreclosed properries (as well as bad loans on which they later foreclosed) and
were credited with putting a floor under plunging home prices. It was also feared,
however, that they would tire of managing scattered site rentals and create another
crisis when prices rose and they dumped their investments.

…(read more)

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