Wall Street Firms Are Buying up Single-Family Homes | Eastern North Carolina Now

American investment banks are purchasing single-family homes in an effort to profit upon skyrocketing rent and property values.

ENCNow
Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.

    American investment banks are purchasing single-family homes in an effort to profit upon skyrocketing rent and property values.

    As The Daily Wire previously reported, CoreLogic's Single-Family Rent Index from April showed a "national rent increase of 5.3% year over year, up from a 2.4% year-over-year increase in April 2020." The group noticed that "as demand for more space and outdoor amenities remains, detached rentals, in particular, are experiencing accelerated growth with a 7.9% year-over-year increase in April, compared to growth of 2.2% annually for attached rentals."

    A more recent report from the National Association of Realtors explained that average American home prices in June 2021 reached $363,300 — a 23.4% increase over the average of $294,400 in June 2020.

    As CNN Business writer Hanna Ziady summarized, rapidly rising rent and property values are drawing Wall Street investment banks to the housing market:

  • According to John Burns Real Estate Consulting, in the first three months of this year, nearly a quarter of all homes sold in the United States were going to investors. That's a broad umbrella that covers everything from mega institutions to individuals buying vacation homes, but BlackRock, JPMorgan Chase and Goldman Sachs were among the big-name buyers.
  • Institutional investors still own only about 2% of all single-family rentals in the United States, or roughly 300,000 homes, according to John Burns research director Rick Palacios.

    The same trend is occurring in England, where American companies are likewise purchasing residential real estate:

  • Institutions poured a record £3.7 billion ($5 billion) into the UK build-to-rent sector in 2020, almost a third of which came from first-time investors, according to real estate consultants Knight Frank. This year's number is likely to come in even higher, with inflows in the first three months of the year alone reaching almost £1.3 billion ($1.8 billion) — a 16% increase on the same period last year.
  • One of the institutional investors actively seeking single-family housing opportunities is Goldman Sachs, which earlier this year bought 900 single-family houses in the northwest of England, and is now partnering with developers to build more homes.

    Mortgage-backed securities currently represent $40 billion of the Federal Reserve's $120 billion monthly asset purchases, which are meant to stimulate economic activity following COVID-19 and the lockdown-induced recession. Likewise, the central bank's near-zero target for the federal funds rate — the interest rate at which private banks can borrow from one another overnight — causes other interest rates in the economy to drop, including those for mortgages.

    As lawmakers pointed out to Fed Chair Jerome Powell at a recent hearing, the central bank's monetary policies decrease the cost for investors and homebuyers to purchase real estate, leading to higher prices.

    Last week, China — which now encourages couples to have up to three children — announced regulations upon its real estate sector to promote affordability for young families. Chinese President Xi Jinping believes that "housing is for living in and not for speculation."
Go Back


Leave a Guest Comment

Your Name or Alias
Your Email Address ( your email address will not be published)
Enter Your Comment ( no code or urls allowed, text only please )




North Korea Demands Lifting of Sanctions on Fine Suits and Premium Liquor Before Nuclear Talks Resume Guest Editorial, Editorials, Op-Ed & Politics There are two justice systems: One for the Elites and the other for the rest of us


HbAD0

Latest Op-Ed & Politics

zeroes in on lab leak and gov't coverup of responsibility
The fundamental problem is that the current system focuses on minimum performance and not high performance by our students
The message needs to be sent not because of what Milley did, but to prevent such insubordination in the future

HbAD1

RINO replaces stalwart conservative Dale Folwell as State Treasurer
Gerald Baker spoke to Morning Wire about the mainstream media's 'vilification of Donald Trump'
polling for many British news magazine "The Economist"
key policy achievement for Trump before even being swonn in, Canada next

HbAD2

 
Back to Top