A massive buy-to-rent scheme is hitting the housing market

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• Brokers constantly blame low inventories of single-family houses for sky-high prices.
• Cerberus Capital Management and Amherst Holdings are raising millions to buy single-family homes and rent them out.
• PE firms are paying prices at the peak of the market for folks who actually want to live in the homes they buy.

The first wave came during the housing bust when large private-equity firms acquired tens of thousands of single-family homes out of foreclosure for cents on the dollar. The biggest players have since been sold off to the public as REITs, such as Blackstone’s Invitation Homes which owns about 48,000 rental houses.

Blackstone was the trailblazer in financializing rents. It issued the first rent-backed structured securities in November 2013. This has become a common funding mechanism. And shortly before the Invitation Homes IPO, it obtained Fannie Mae guarantees for $1 billion in rental-home mortgage-backed securities.See the rest of the story at Business Insider

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SEE ALSO: A 'boogeyman in the housing market' is making it tougher for Americans to own homes, Morgan Stanley says