Big Banks join the rent-aissance… Fewer people are buying houses, so banks are shifting their focus from home loans to rental properties: this week JPMorgan said it’s teaming up with property giant Haven Realty Capital to build $1B worth of single-family homes for renters. As US homes sales continue sliding, JPM is preparing for a rental surge:
Renting is the new buying… because many can’t afford to buy right now. Mortgage rates have more than doubled in the past year, making the long-term cost of homeownership prohibitive for many. While banks are earning higher interest, mortgage demand has plunged 40% from a year ago.
It pays to be pragmatic… JPM could capitalize on America’s housing-affordability crisis by capturing a new generation of renters. Builders first popularized the build-to-rent model during the Great Recession as a way to keep building even when people weren’t buying. Now builder confidence is at its lowest level since 2012, thanks to soaring rates and construction material costs. By shifting strategy banks could see another build-to-rent boom.