The inventory of single-family homes for rent has swelled since the housing crash, and it is about to swell more. Business Insider reports:
The first wave came during the housing bust when large private-equity firms acquired tens of thousands of single-family homes out of foreclosure for cents on the dollar. The biggest players have since been sold off to the public as REITs, such as Blackstone's Invitation Homes which owns about 48,000 rental houses.
Blackstone was the trailblazer in financializing rents. It issued the first rent-backed structured securities in November 2013. This has become a common funding mechanism. And shortly before the Invitation Homes IPO, it obtained Fannie Mae guarantees for $1 billion in rental-home mortgage-backed securities.
This second wave is different. PE firms are paying prices at the peak of the market, amid ceaseless complaints that there isn't enough inventory of homes for sale, for folks who actually want to live in the homes they buy.
And these are just the biggest players. There are thousands of smaller players. And all but mom-and-pop investors pay cash and then fund the purchases with leverage at the institutional level.