The latest economic and policy trends facing mortgage servicers

Join this webinar for an in-depth roundtable discussion on economic and policy trends impacting servicers as well as a look ahead at strategies servicers should employ in the next year.

2021 RealTrends Brokerage Compensation Report

For the study, RealTrends surveyed all the firms on the 2021 RealTrends 500 and Nation’s Best rankings, asking for annual compensation data for the 2020 calendar year.

Zillow analyst on whether home prices can keep climbing

Today’s episode of HousingWire Daily features an interview with Nicole Bachaud, as she discusses annual and monthly home price appreciation growth, rising inventory levels and rent prices.

Lenders, it’s time to consider offering non-QM products

The non-QM market is making a comeback following a pause in 2020. As lenders rush to implement, Angel Oak is helping them adopt these new lending products.

InvestmentsPolitics & MoneyReal Estate

NYT: First-time homebuyers competing with Wall Street-backed investors

Conventional buyers often “do not even have a chance,” story says

It’s always been tough to be a first-time buyer, stretching to get into a starter home. Today, there’s an extra challenge: an unprecedented level of competition from investors who often are backed with Wall Street money, according to a New York Times story

“Rising construction costs, restrictive zoning rules and shifting consumer preferences, among others — has already led to a scarcity of affordably priced housing in many big cities,” the story said. “Investors, fueled by Wall Street capital, are snapping up much of what remains.”

Last year, investors bought about one in five of the nation’s starter homes, defined as the least expensive third of local markets, the Times said, citing CoreLogic data. Some are so-called wholesalers who purchase houses suitable for flipping and sell within weeks or months to investors, while others are buying properties they plan to renovate and resell themselves.

In some of the nation’s hottest markets, investors bought close to half of the most affordable homes and as much as a quarter of all single-family homes sold last year. 

“Often, conventional buyers do not even have a chance,” the story said. “In some cases, wholesalers make unsolicited offers on properties, then flip them to investors without putting them on the public market.”

Small-time real estate investors were around prior to the housing bust. In fact, they bore some of the brunt of the public’s blame for the housing crash. What changed after the Great Recession with the involvement of corporate America, the Times story said.

Companies like Invitation Homes, backed by the private equity firm Blackstone Group, bought up tens of thousands of homes and rented them out. Wall Street firms expanded investments in “flip-and-fix” loans securitized by so-called hard-money lenders. Last year, Angel Oak announced a $90 million securitization of fix-and-flip loans.  

Last week, legendary Wall Street buyout firm KKR said it was doubling down on house flipping. The private equity firm run by billionaires Henry Kravis and George Roberts said it is putting another $250 million into Toorak Capital Partners, which buys short-term loans made to real estate investors.

“Large-scale institutional investors bought tens of thousands of homes for less than they cost to build,” the Times story said. “At first, the flood of capital seemed like a one-time opportunity arising from the collapse of the residential real estate market. Once the bargains dried up, the investors were expected to stop buying. Except they didn’t stop.”

Most Popular Articles

These are the hottest housing markets in America

A housing market report from RE/MAX found that 36 of 51 metro areas had double-digit year over year sale price increases in August. Boise led the way.

Sep 17, 2021 By

Latest Articles

Housing permits hold the key for economic expansion

Housing permits, for me, is one of the most important housing and economic data lines we have in America. As long as housing permits are moving upward, not only is housing doing ok but the economic expansion is moving along nicely post-1996. HW+ Premium Content.

Sep 21, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please