Homes Built For Renters : Housing Recovery? Really?

How many times have we heard about the housing problem being solved as values started to increase and demand for easier money to build was the talk of the town? The question that I have is, in the face of the banks still hold prosperities waiting for the market to go up, and with a the number of these foreclosed homes still not listed, how do the marketers remain optimistic proclaiming the housing problem solved?

Is this just more hyperbole from Washington trying to convince people to get back into the market even when the banks really don't want to loan as they are making more money investing in other venues other then housing with the money from the fed?

As with most news these days coming the press and our betters in Washington, can we take all this good news on the housing recovery with a grain of salt? Is there any news these days that is believable? What source of information is trustworthy?

New Homes Built for Renters
Source: Conor Dougherty, "New Homes Get Built With Renters in Mind," Wall Street Journal, November 3, 2013.
November 15, 2013

More single-family homes across the nation are being built for renters, a shift that mirrors a steady decline in homeownership in the years since the housing bust, says the Wall Street Journal.

Until recently, real estate investors had focused primarily on scooping up tens of thousands of foreclosed homes, at a sharp discount, and converting them into rental properties. Now that the pool of these properties has declined and prices have risen, these investors are snapping up newly finished single-family homes to be used as rentals, or even developing vacant lots from the ground up.

• Last year 5.8 percent of the 535,000 single-family homes started were being built as rentals, up from 4.8 percent in 2011 and the highest share since at least 1974, according to an analysis of census data by the National Association of Homebuilders.
• From 1974 to the home-price peak in 2006, only about 2 percent of single-family homes were built for rentals.

Building new rental homes undercuts part of the thesis of investing in single-family rental homes. Investors were attracted to this market largely because they could buy houses for less than the "replacement cost" or how much it would cost to build a new home.

But investors say they can still make profits. They point out that new homes typically come with builder warranties and cost less to maintain, at least in the initial years of ownership.