How Can Houses Be Unaffordable AND Booming? | The Wentworth Report

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https://wentworthreport.com/2021/10/02/how-can-houses-be-unaffordable-and-booming/

How Can Houses Be Unaffordable AND Booming?ByJohn Rubino.

How is it that homes are both unaffordable and soaring in price? As with so many other things that shouldn’t be, the answer can be found at the intersection of Wall Street and easy money. During the previous decade’s Great Recession, hedge funds and private equity firms figured out that they could borrow for next-to-nothing and buy up the houses that banks were repossessing, then rent those houses back to millions of newly homeless Americans for good returns. Combine these positive cash flows with massive recent price appreciation, and those foreclosed houses turned out to be phenominal investments. Now Wall Street is doubling down, using hundreds of billions of essentially free money to outbid individual buyers for whatever houses are still avalable. In some cases investment giants like Blackrock buy up entire neighborhoods at big premiums to the…

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