Investors, renters feeding surge in single-family home rentals

Approximately 16.1 percent of entries on multiple listing services are single-family rentals, more than twice as many as in 2006.

Investors are being drawn in by the availability of relatively cheap, distressed properties and the demand for housing, particularly rentals. With the homeownership dropping, many Americans who no longer own houses may still wish to live in them, rather than apartments. As a result, Real Estate Economy Watch reports, the business is now worth about $3 trillion and still growing.

More than 20 million rental homes are available, which account for more than 50 percent of the rental units available on the market, according to data from CoreLogic. Despite the number of real estate-owned properties being turned into rentals, the supply of such homes was 4.5-months worth in December, compared to a 6.2-month inventory of homes for sale.

Investors and property management companies are seeing a relatively high rate of closings, driven largely by families rather than the younger tenants apartments tend to attract. CoreLogic economist Sam Khater told the news source that this change in the market is largely taking place in the hardest-hit parts of the nation, particularly areas of California, Arizona and Nevada that have both distressed properties and Americans looking for housing.