Greed is good — even in suburbia

Big companies banking on homeownership rates staying low are scooping up suburban single-family homes across the country.

Firms like American Homes 4 Rent, Colony Starwood Homes, Progress Residential and Streetlane Homes have spent $40 billion buying 200,000 houses to rent out across the United States, the Wall Street Journal reported, Citing Data From Green Street Advisors. However, they still own less than 2 percent of American rentals.

In the Tennessee town of Spring Hill, those four investors own nearly 700 houses, tax records show. That’s around three-quarters of the homes that are available to rent in the town, the local Realtors’ Association told the newspaper.

The companies are relying on homeownership keeping down and rental prices continuing to rise. American homeownership is at a 50-year low, according to the Journal.

“The rental stigma has really subsided,” Michael Cook, the operations chief Streetlane Homes, which owns about 4,000 houses. “People are realizing that houses are not necessarily the best places to store wealth.”

Big investment firms previously focused on apartment buildings, office towers, shopping centers and warehouses. But during the financial crisis, when millions of homes were sold in foreclosure auctions, they started picking up homes to rent out. Thomas Barrack Jr. and Barry Sternlicht, who combined their holdings into Colony Starwood, and Blackstone Group were among the buyers. In 2013, Blackstone Group completed its first sale of bonds backed by rental home payments. [WSJ] — Miriam Hall