Wall Street investors bet on single-family rentals as mortgage payments stack up

More than 1 million homeowners have stopped making debt payments

TRD NATIONAL /
Sep.September 18, 2020 09:00 AM
Wall Street investors are prepared to buy and turn single-family homes into rentals when forbearance programs expire and homeowners look to sell. (iStock)
Wall Street investors are prepared to buy and turn single-family homes into rentals when forbearance programs expire and homeowners look to sell. (iStock)

Wall Street landlords, which emerged during the 2008 downturn, are prepared for windfall as homeowners skip mortgage payments.

Firms including Brookfield Asset Management, Blackstone Group and J.P. Morgan Asset Management have each invested hundreds of millions in single-family rental companies, the Wall Street Journal reported. As the expiration date of the federal forbearance programs draws near, many Americans may look to sell their homes in order to make ends meet.

Shares in the two largest single-family rental companies, Invitation Homes Inc. and American Homes 4 Rent, have beaten the S&P 500, rising 79 and 59 percent, respectively, since the stock market bottomed out on March 23.

Americans have accumulated $10 trillion in home equity, but their ability to continue mortgage payments is unclear. While 3.5 million home loans — 7 percent of the overall market — are in forbearance, according to the Mortgage Bankers Association, more than 1 million have stopped making payments without entering into a deferral program.

Single-family rentals emerged as an asset class in the last recession, but some firms hope to offer options to homeowners which would let them remain in their home after selling it. EasyKnock, a New York-based firm, has bought $187 million in homes to perform sale-leasebacks, a common transaction in commercial real estate, where the homeowner sells to investors and leases the asset from the buyer. [WSJ] — Georgia Kromrei


Related Articles

arrow_forward_ios
Affirmed Housing CEO James Silverwood and the development site (Affirmed, Google Maps)

Affordable developer proposes complex in Chatsworth

Affordable developer proposes complex in Chatsworth
About 3.5% of LA and Orange Counties homes were 90 days past due in June

In SoCal, “seriously delinquent” mortgages are on the rise

In SoCal, “seriously delinquent” mortgages are on the rise
Homebuyers across Southern California continue to gobble up properties

SoCal homebuying surge bumps up against low inventory

SoCal homebuying surge bumps up against low inventory
Taraji P. Henson, Cardi B, and Matthew Perry (Credit: Rich Fury/Getty Images, Frazer Harrison/Getty Images, and Frederick M. Brown/Getty Images)

Cardi B, Taraji P. Henson among celebs renting $35K/month Malibu pad

Cardi B, Taraji P. Henson among celebs renting $35K/month Malibu pad
Southern California home sales rose 27 percent in July compared to June

SoCal surge: Home sales rose 27% in July

SoCal surge: Home sales rose 27% in July
City Ventures CEO Mark Buckland and a rendering of one of the townhouses

City Ventures wants to develop complex of townhouses in Commerce

City Ventures wants to develop complex of townhouses in Commerce
There were fewer deals across Southern California in June than any other year

SoCal housing market rebounds in June but still lags far behind 2019

SoCal housing market rebounds in June but still lags far behind 2019
Spencer Rascoff and Nick Daze (Credit: John Lamparski/Getty Images)

Spencer Rascoff-backed rental platform PocketList launches in LA

Spencer Rascoff-backed rental platform PocketList launches in LA
arrow_forward_ios

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

Loading...