NEW YORK–There has been a merger among two major players in the relatively new industry of big institutional single-family home landlords.
The effect it will have on the market and on mortgage lending is yet to be determined.
The $4.3-billion deal involves a combination between Invitation Homes, a rental business spun out of private equity company Blackstone Group, and Starwood Waypoint Homes. Together, the two companies own 82,000 single family homes in more than a dozen U.S. markets.
The deal comes about as the number of homes available at a discount shrinks. The big institutional buyers bought up homes in the wake of housing crisis when hundreds of thousands of homes were available in foreclosure and millions of Americans became renters.
The rate of homeownership in the United States has declined to 63.7% from approximately 69% prior to the housing crisis, Harvard University’s Joint Center for Housing Studies recently reported.
“As home prices rise, most of the institutional investors are dramatically slowing the rate at which they buy new homes,” Laurie Goodman, director of the Urban Institute’s Housing Finance Policy Center, told The New York Times. “And with the easy money days behind them, they need a more efficient cost structure.” She said the merger was a way accomplish that by gaining further economies of scale.
Since 2011, the New York Times reported that Blackstone has spent $10 billion on foreclosed homes that it now rents.