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
Knock CFO Michelle DeBella and CEO Sean Black (Photos via Knock; PR Newswire)

Knock hires ex-Lyft, Uber exec as first CFO

Knock hires ex-Lyft, Uber exec as first CFO
Mortgage applications reach pandemic peak

Mortgage applications reach pandemic peak

Mortgage applications reach pandemic peak
Housing supply is tighter than ever. (Getty)

Active home listings hit record low

Active home listings hit record low
(Getty)

Mortgage applications fall during holidays even as rates sink

Mortgage applications fall during holidays even as rates sink
U.S. pending home sales declined for the third consecutive month. (iStock)

Pending home sales decline for third straight month

Pending home sales decline for third straight month
Home prices’ 12-month gain hit a six-year high in October. (iStock)

Home prices hit fastest growth in six years

Home prices hit fastest growth in six years
New home sales slide but prices are rising

New home sales slide but prices are rising

New home sales slide but prices are rising
Home purchase applications are down due to high prices.

Mortgage applications fall as home prices soar

Mortgage applications fall as home prices soar
arrow_forward_ios

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

Loading...