Tags: Homes | rent | own | Dream

USA Today: Renting Homes (Instead of Owning) May Be New ‘American Dream’

Wednesday, 06 Jun 2012 11:34 AM

More and more American families are renting their homes these days and private equity firms have taken note.

The foreclosure crisis will drive 3 million former homeowners into renting single-family homes between 2010 and 2015, says John Burns, CEO of John Burns Real Estate Consulting, according to USA Today.

Meanwhile, the single-family home rental was the fastest-growing segment of the rental market from 2005 to 2010, Fannie Mae reports separately, citing U.S. Census data, USA Today adds.

Editor's Note: Google Banned This Video But You Can Watch it Here

"We've never seen anything like this," says Burns.

With numbers like that, private equity firms are taking note.

"In the next five to 10 years, you'll see tens of billions, if not hundreds of billions, of dollars of private equity" pouring into the single-family rental business, says Justin Chang, principal of investment firm Colony Capital, the newspaper adds.

In the past six months, Colony has bought more than 1,000 homes to be used as rentals namely in former boom states like Arizona, California and Nevada.

Colony is eyeing Texas, Georgia and Florida, and over the course of a year will invest $1.5 billion in single-family rentals, Chang adds.

The housing sector appears to be hitting a bottom and destined to bump along before making more meaningful recovery.

Commerce Department data shows new-home sales rose at a seasonally adjusted annual rate of 343,000, an increase of 3.3 percent from an upwardly revised March rate of 332,000.

April's number was up 9.9 percent on year.

"It is a little better than expected, but housing is still stuck in a rut here," says Jacob Oubina, Senior U.S. Economist at RBC Capital Markets, New York, according to Reuters.

"With all the news coming out of Europe, this is really below-the-radar data."

Pending home sales, defined as signed contracts but not yet closed, were down in April.

The National Association of Realtors said its index of pending home sales fell 5.5 percent to 95.5 in April, from a downwardly revised 101.1 in March, according to the AFP newswire.

Pending home sales were up 14.4 percent from April of last year.

Editor's Note: Google Banned This Video But You Can Watch it Here


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