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marmar

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Whose Housing Recovery?


from Dollars & Sense:





BY DARWIN BONDGRAHAM | March/April 2013


The business press has been reporting a “recovery” of the U.S. housing market for over a year now, as the average prices of single-family homes rise across the country. Implied in these stories is the return of a healthy real-estate market, in which the average American family has the resources—in terms of income, savings, and access to credit—to purchase its own slice of the American dream.

The housing recovery we are seeing right now, however, is anything but indicative of broader gains—increased wages, falling unemployment, or renewed access to credit for consumers—being shared across the economy. The biggest buyers of single-family homes today are not new owner-occupants, but investors. While most of these investors are so-called “mom-and-pop” buyers who own an extra rental house or two in their hometowns, large private investors are also increasingly buying up homes.

These investors are especially focusing on foreclosed properties in the “sun” and “sand” belts—from Florida and Georgia to Arizona, Nevada, and California. Private-equity firms, investment banks, and other high-finance investors are gobbling up housing stocks in these markets by the tens of thousands of units. They have taken to calling single-family rental homes a “new asset class,” alongside corporate debt, government bonds, currencies, and financial derivatives.

From Owners to Renters

Under the so-called housing recovery, the foreclosed homeowner is being relegated to the status of renter. Increasingly, the new renters’ role will be to pay their new high-finance landlords for shelter, all in order to secure big returns for the millionaire clients and institutional partners who are backing foreclosure purchases with billions of dollars. ..........(more)

The complete piece is at: http://www.dollarsandsense.org/archives/2013/0313bondgraham.html



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