Housing market could be helped with bulk buying

According to Morgan Stanley housing analysts, investors buying foreclosed properties in bulk could help stabilize U.S. housing prices while providing affordable rentals to meet the growing demand for rental properties. The housing market is saturated with distressed properties, and bulk buying could also shrink the U.S. housing supply, helping sellers remain competitive and sell faster, Bloomberg reported.

Head of housing strategy at Morgan Stanley told the news source that the main problem holding up a housing market recovery is the backlog of properties on the market. According to Morgan Stanley research, the U.S. housing market has 2.2 million vacant homes available for sale and 7.5 million homes facing foreclosure. These properties are bogging down the market, forcing home values to drop. Bulk buying would clear those out while helping provide affordable housing.

A recent development that may have little effect on the housing market is the recent U.S. credit rating downgrade by Standard and Poor. Bryan Ellis Real Estate reported that the drop from AAA rating to AA-plus is expected to affect credit ratings, but might cause minimal changes to the real estate market.

Mortgage rates are expected to stay low as the debt ceiling increase is likely to increase mortgage rates, so lenders are keeping rates low to increase mortgage applications, the news source said.  

More News