Wall Street is cashing in on post-2008 housing crisis

2019-05-31T20:19:00-04:00

Blackstone Group is cashing in on its bet on the suburban rental class. The private-equity firm late Tuesday sold more than $1 billion of shares of Invitation Homes Inc., the giant single-family home landlord it launched following the financial crisis in a wager that many Americans would be willing to rent the suburban lifestyle they could no longer afford to own.

In the two years since private-equity firm Blackstone Group launched its suburban home management service, Invitation Homes, the company's stock has gone up by over 26%.

During that same time, homeownership has fallen to its lowest levels since the mid-1990s, rents have edged upward in the nation's biggest metro areas, and an increasing number of Americans have become long-term tenants of Wall Street-based investment firms.

Simply put: Owning rental housing is a booming business that, increasingly, is seeing profits flow into fewer and fewer hands. The phenomenon is due in large part to Obama-era policies enacted at the height of the Great Recession, when credit was scarce, demand was low, and the government moved to incentivize private investors into buying up flailing suburban properties. Nearly a decade later, following years of under-building in the housing sector, those policies and investments have begun bring in juicy dividends for the investment firms and their shareholder...

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Wall Street is cashing in on post-2008 housing crisis