Hello, LOs!
After a hiatus in the first part of 2020, investors are back to buying up single-family homes and turning them into rentals. I've been thinking about how this impacts the overall housing market, especially from an affordability and supply standpoint.
Not all investors are big-name Wall Street firms — although, yes, the Blackstone Group recently returned to single-family rentals with a minority investment in Tricon Residential. (You may remember the firm's first foray into single-family rentals, Invitation Homes.)
Second and third homes also count as investment properties, and are also often financed with mortgages.
A recent Redfin report found that investors purchased one out of every five low-priced homes sold in the first quarter.
The trend certainly isn't helping those who are still desperately looking for an affordable primary residence. As it turns out, investors hunting for homes to rent are prowling in the same affordable areas prospective homebuyers are. Investors have the highest market share in Miami, followed by Atlanta, Jacksonville, Fla., and Charlotte, N.C.
The report also attributed investors' renewed interest in single-family homes to recent slackening of eviction protections which were implemented early on in the pandemic. That issue is far from settled, however.
Those searching for the home of their dreams in an affordable area may need to settle for renting one, even if they could afford to buy a home in a normal market.
So, LOs, are you seeing more investor purchases on originations? How are lenders thinking about the forecasted rents in some of these scenarios, given how little we know about the longevity of remote working?
Send me your thoughts, anonymously, of course: gkromrei@housingwire.com
Georgia Kromrei
Senior Mortgage Reporter, HousingWire
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