Investors building single-family rentals to meet demand

Rising prices and reluctant lenders have put homebuying out of reach for many

National /
Jan.January 08, 2021 09:15 AM
High demand and low supply has driven house prices up (iStock)

High demand and low supply has driven house prices up (iStock)

Instead of buying houses in foreclosure and converting them to rentals, as many investors did in the last recession, investors are building their own rental communities.

They are seeking to profit from a trend: Many Americans are seeking more spacious homes, where they can more comfortably work from home and have more space for family, but many cannot afford to buy or are not ready to commit, the Wall Street Journal reported.

High demand and low supply has driven house prices up, and ownership is unaffordable for average earners in 55 percent of U.S. counties, up from 43 percent a year earlier, according to Attom Data Solutions.

But with few affordable homes, and no foreclosure crisis, investors like the Carlyle Group and American Homes 4 Rent have shifted their approach. More than 50,000 such homes were purpose-built for rentals during the 12 months ended Sept. 30, according to John Burns Real Estate Consulting, roughly two-thirds more than the average over the past four decades.

“Banks and lenders stopped providing financing to the lower middle class and so home builders stopped building entry-level homes,” Thibault Adrien, whose Lafayette Real Estate began buying foreclosed homes a decade ago, told the newspaper. “The last way to increase our exposure was to build our own.”

[WSJ] — Georgia Kromrei 


Related Articles

arrow_forward_ios
(iStock/Illustration by Kevin Rebong for The Real Deal)
January home prices up 10% in biggest annual gain in 7 years
January home prices up 10% in biggest annual gain in 7 years
(iStock/Illustration by Alexis Manrodt for The Real Deal)
Mortgage rates surge — and refinance applications sink
Mortgage rates surge — and refinance applications sink
Home sales were the busiest January on record, but still the fifth month of decline in a row. (iStock)
Pending home sales fall for fifth consecutive month
Pending home sales fall for fifth consecutive month
CBRE CEO Bob Sulentic. (CBRE, Getty)
CBRE’s 2020 earnings down 8%
CBRE’s 2020 earnings down 8%
January is the second consecutive month of increase in new home sales. (Getty)
Sales of new homes up 4.3% in January
Sales of new homes up 4.3% in January
(iStock/Illustration by Alexis Manrodt for The Real Deal)
US home prices are more than 5% too high: Fitch
US home prices are more than 5% too high: Fitch
The Texas snow storm was partly responsible for the decline in mortgage applications. (Getty)
Texas storm, increasing rates freeze home mortgage market
Texas storm, increasing rates freeze home mortgage market
(iStock)
US home prices jump 10.4% in best year since 2013
US home prices jump 10.4% in best year since 2013
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...