City Lab reports that the growth of single-family homes available for rent is having a profound effect on the U.S. housing market. The number of single family rentals are now more than 12 million which accounts for 35% of all rental housing and is valued at $2.3 trillion. Although the concept of single family rentals is nothing new, in the past most of it was done through individual owners or real estate companies. It's now big business and attracting corporations as the percentage of homeowners has fallen to the lowest levels since the 1960s.
More than $220 billion in housing wealth has been transferred from Americans who once owned, or would have owned, homes to large corporations.Those are the big takeaways of a recent study by Andrea Eisfeldt of UCLA’s Anderson School of Management and industry expert Andrew Demers, published as a working paper by the National Bureau of Economic Research (NBER).
This is yet another of the economy-shifting consequences of the financial crisis of 2008. The crisis took a huge bite out of housing prices, and rising unemployment put large numbers of homeowners underwater in their mortgages. A good many fell victim to foreclosures, and plummeting housing values meant that they often had to sell their homes for a fraction of their value.
Into the breach stepped large corporations, real-estate investors, and financial institutions that saw a huge investment opportunity in these bargain-basement-priced single-family homes. According to a 2018 report in Curbed, a handful of large companies like Invitation Homes, American Homes 4 Rent, Progress Residential, Main Street Renewal, and Tricon American Homes own approximately 200,000 single-family rental homes and that number is growing.
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