Feb 26 A top Federal Reserve official on Tuesday
urged a better understanding of the investors, large and small,
who are buying up the stock of foreclosed homes and converting
them into rental housing.
"This is something that really needs to be understood: who
these investors are, and how do different types of investors
behave in different sorts of situations," Fed Governor Jeremy
Stein told a housing conference in Washington.
Since the U.S. mortgage-market implosion sparked the
2007-2009 global financial crisis, home prices have dropped as
Americans who lost homes turned increasingly to rental housing.
Although the housing market started gaining traction last
year, regulators such as the U.S. central bank are increasingly
interested in exactly who is in control of the housing stock
that has been newly converted to rental.
That question remains unclear, Stein said, adding that
officials need to think about what's best for families.
"My gut instinct is that it's probably hard to (find)
simple, sweeping, one-size-fits-all answers ... that this is a
good thing or a bad thing," he said.
Stein added that the answer will likely depend on the nature
of the housing stock, whether it is urban, suburban or rural, as
well as on the characteristics of the investors.
"However strongly you feel about ... the values of home
ownership, I think one has to recognize that this is an
inexorable part of at least the short-run adjustment mechanism,"
he said. "And the alternative would have probably been more
unattractive. If we hadn't had this equilibrating mechanism we
would have likely seen ever bigger declines in house prices, and
a harder-to-arrest spiral."
Stein did not comment on monetary policy or the economy.