Quote:
Originally Posted by jdm2008
You are correct, that logic doesn't make sense. More foreclosures will mean more demand for rentals, but as foreclosed homes and potential home buyers will be turned into renters those foreclosed homes will be turned into rentals which means a larger supply of rentals.....
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Apartment Rentals Surge in U.S. on Home Foreclosures, Job Gains - Bloomberg
Banks do not want to be landlords - so it is naive to assume that foreclosed homes - owned by the banks -and in many cases damaged and falling into neglect - will simply be renovated (at the bank's expense) and rented out. It would not be cost effective for them, given all the complications associated with being a landlord - vetting tenants, rent collection, inspections, rent defaults, property maintenance, insurance, legal fees...........etc etc etc
And whilst some people may be able to move in with relatives and rent their property out to help cover the mortgage payments this is not generally a practical long term solution for them.
This may be one solution for holding down rental prices - the Right to Rent Act:
http://www.washingtonwatch.com/bills...1_HR_5028.html
http://www.commondreams.org/headline/2010/06/24-0
If it ever gets passed of course..........
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