In today’s economy, there are few people whose opinions can drive national economic policy and change the way entire industries are perceived. The highly trained 331 economists who work for Federal Reserve are among them. Their expertise and impartiality give their views on critical issues extraordinary credibility in the halls of Congress, the Administration, the media and, of course, the Fed itself.
Two top Fed economists have just published a new study on investment in single family rentals. Though the focus of their concern is plans to securitize single family rentals, they address ”business investing” broadly. Their findings could help convince policy makers that all investors are a force for economic instability that could, in future, help provide fodder for years to those who would like single family rentals converted back to owner-occupancy.
Rebecca Molloy, a senior economist with a Ph.D. in Economics from Harvard and Rebecca Zarutskie, who got her doctorate at MIT, published Business Investor Activity in the Single-Family-Housing Market December 5.
The authors make passing mention of the lifesaving role investors played during the foreclosure crisis, noting only that investing “has likely aided the recovery in certain housing markets” and “may also have supported house prices in markets where that activity was concentrated.” Hedge funds get more credit for investing in new platforms for property management, marketing, and servicing, and by expanding the number of single-family homes for rent in relatively attractive neighborhoods–at least in some cities.
“On the positive side, these investors are deploying capital to purchase and renovate houses that otherwise might have remained vacant for a long time. Tight financing conditions in the primary mortgage market have likely limited the ability of some potential owner-occupiers to purchase and renovate these properties themselves. …read more