Mortgage rates have doubled in the last three years. The Federal Reserve announced on Wednesday that the base rate would stay at its 23-year high.

California’s Legislative Analyst’s Office says monthly payments on a mid-tier home are up 80% since the start of the decade. 

Corporate Investors Are Putting Their Money Residential Rental Units

Corporate investors became seriously interested in the rental market after the credit crunch of 2008. Some are now exclusively building entire rental estates.

Doug Ressler of commercial real estate firm Yardi Matrix told the media:

“There’s still an inadequate supply of housing, the cost of housing has continued to rise, renters are renting longer. The large providers are looking at build for rent as a legitimate strategy to be able to fulfill demand for those people that are on a budget and looking to have a larger square footage than an apartment.”

Bill Shopoff built the SolTerra estate after realizing the huge untapped demand for larger rental homes.

Shopoff fitted out his three and four-bedroom homes with Spanish-style roofs and colorful mosaic tiles. He also included private garages and state of the art appliances.

The developer also said tenants can get to know each other in the community pool, clubhouse and landscaped parks.

The estate opened last summer. Rental rates range from $3,299 a month for a 1,520-square-foot home on the low end. Shopoff charges $4,460 for units with 2,400 square feet.

Some of the world’s largest firms have smelled hefty profits in the distorted housing market and Blackstone, the world’s biggest private equity fund, snapped up leading developer Tricorn Residential for $3.5 billion last month.

Critics Say The American Dream Is Becoming Unattainable

But critics have warned that the American dream of home ownership is becoming increasingly unobtainable for young families squeezed out of a market now geared to renting.

However, Shopoff says corporate interest is increasing the number of homes being built. Thus, this is allowing people to realize an otherwise impossible lifestyle.

Roofing contractor Deonte Palm lives in one of Shopoff’s developments after moving from an apartment. They moved from a tiny apartment where “we were feeling the walls closing in on us”.