The dovish message of the Federal Reserve grew a little louder late Tuesday, as current Fed chairman Ben Bernanke said that the government's largesse is likely to continue for some time -- even after unemployment rates fall to below 6.5 percent.
No evidence of asset price misalignments at this time
November 14, 2013
Janet Yellen, vice chair of the Federal Reserve Board of Governors, appeared every bit the monetary policy dove that investors expected during her first big hearing in front of the Senate Banking Committee as Fed Chair nominee.
Yields on Fannie Mae and Freddie Mac mortgage securities fell to their lowest level in over a month after the Federal Reserve shocked the market by deciding not to cut back on its monthly purchases of Treasurys and mortgage backed securities.
Build to rent allows investors to buy newly built homes and rent them out instead of selling them. Because the homes are new, investors are able to charge higher rent prices and tenants often stay in the home for longer periods of time. But the question remains: Why would builders move into the rental market during a time when homes are selling quickly and at higher prices than any time in the past decade?
Today the average student debt resulting from a four-year degree stands at $30,000. According to a report released by American Student Assistance in 2015, 71% of non-homeowners surveyed who carry student debt say the burden of monthly payments has kept them from purchasing a home. More than half of those say their student debt loads will likely prevent home ownership for another five years.
Currently, institutional investors control approximately 170,000 properties (a relatively small portion of the overall SFR space, which is dominated by smaller investors, and estimated to include 11 to 13 million properties). KBRA reports that 105,000 properties have been included in the 26 single-borrower deals done to date, which suggests there are somewhere north of 60,000 properties that could still be securitized.