What Recovery? 10.7 Million Homes Still Have Negative Equity
From Profit Confidential
January 31, 2013 - 1:42am
As I have written in these pages recently, the housing market is still missing the most important part: first-time homebuyers. We have large institutions buying up homes in bulk transactions instead of a good old-fashioned housing recovery where actual home occupants fuel the recovery.
Financial institutions like The Blackstone Group L.P. (NYSE/BX) are eating up the supply of foreclosed and empty homes and driving prices higher in the housing market. Why are they doing it? Because these big funds can’t get better returns elsewhere. Stock market? It’s too high. Bond market? It doesn’t pay enough. “Better buy cheap houses and get tenant money,” seems to be the new thinking.
But is the financial institutional buying of homes going to really change things for the U.S. housing market?
According to CoreLogic, 10.7 million homes or 22% of the entire residential households in the U.S. ...Continue reading this article »