Dive Brief:
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The housing market continues to recover, with the national foreclosure rate easing back to 0.9% (336,000 homes in the process of being foreclosed) at the end of 2016, according to CoreLogic. At the peak of the foreclosure crisis in September 2010, the rate was 3.3% (1.4 million homes).
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Foreclosures in the U.S. have started to return to normal levels with 22,000 completed foreclosures per month in recent months, according to CoreLogic’s 10-year retrospective of the residential foreclosure crisis.
- Miami, which hit a foreclosure peak of 19.2% in early 2011, has returned to a foreclosure rate of 2.1% as of December 2016. Las Vegas has eased back to a foreclosure rate of 1.2% after spiking at 9.6% in the fall of 2012.
Dive Insight:
The rapid expansion in the stock of foreclosed homes during and after the housing market collapse drew the interest of the single-family rental investment community. Around 7.8 million foreclosures have been completed nationwide since the start of 2007. Meanwhile, companies like Blackstone Group’s Invitation Homes spent $10 billion on buying and converting distressed homes since 2012, many of them foreclosed.
Earlier this year, the Dallas-based subsidiary raised $1.54 billion in an initial public offering through the sale of 77,000,000 shares of stock, showing its strength in the single-family rental market.
In February, a report by Attom Data Solutions and Clear Capital suggested that large institutional investors are now backing out of the single-family rental category due to broader home-price increases and are being replaced with smaller investors that are acquiring properties, typically at the entry level, for conversion into rentals.
Single-family homes converted into rentals — the category in which most foreclosed-homes-turned-rentals fall — account for a 35% share of the total rental housing stock according to 2015 American Community Survey data. From 2005 to 2015, the category accounted for more than half of rental housing growth.
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