By Chris Clothier
Is the single family rental boom just another real estate bubble? Or are we witnessing the expansion of a new housing option, one that’s perfect for a generation burned by the housing bust?
There’s only one reason why the housing crash wasn’t any worse than it was on the nation’s homeowners, mortgage lenders and local communities—and it wasn’t the federal government. Private investors have accounted for 15 to 25 percent of home sales since 2008—most of them foreclosures that are poisonous to local home values. In market after market, investors stepped in to stop real estate markets that were in a death spiral and created a price bottom that made recovery possible.
Most investors focused on turning these properties into single family rentals, often to house foreclosure victims. Today, some 52 percent of all rental units in the U.S. are single family homes, housing 27 percent of all renters. Most, 3.6 million, were originally built for owner occupancy but passed into the ranks of rentals when their owners lost them through foreclosure.