How and Why US Single-Family Housing Became an Investor Asset Class

Having historically been avoided by institutional financial investors, U.S. single-family housing-that is, free-standing residential property-received large investment inflows after the global financial crisis of 2007-2009 to rapidly become a substantial asset class. Why? And why then? The materialization of an unprecedented investment opportunity-large stocks of cheap, favorably located urban housing-was certainly pivotal. But the attractiveness of that opportunity was enhanced by a series of parallel and (for investors) propitious historical shifts in four key realms: technology, finance, housing supply, and ideas. In short, the investment transformation that occurred was "overdetermined." The article develops this argument with a focus on investment by the firm that led the way: the Blackstone Group.