New mortgage-backed securities could fuel investor demand

Blackstone’s debut of mortgage bonds that are secured by single-family rental homes heralds the arrival of a new market that could enable institutional investors to more easily snap up single-family homes, Bloomberg reports.

That’s because these securities would help investors in single-family rentals pass on risk to other investors, freeing up cash for them to buy more of the properties.

As it is, investors’ demand for homes has already skyrocketed in recent months.

All-cash sales’ share of total home purchases — an indicator of investors’ share of total home purchases — jumped to 49 percent in September from 40 percent in August, according to RealtyTrac.

The data aggregator also said that institutional investors accounted for 14 percent of total home purchases, the highest level that the firm has measured since it started tracking such sales in 2011.

Investors often purchase homes for the purpose of often converting them into rentals.

Source: Bloomberg