A new paper from the Federal Reserve Bank of Philadelphia will renew political attention to the extent to which the GSEs support the “buy-to-rent” and “rent-to-own” institutional-investor business model backed by controversial GSE credit facilities.  It finds that institutional investment has supported price increases while suppressing home ownership – i.e., the perfect recipe for heightened wealth inequality given the importance of home ownership to low-and-moderate income households.  This inequality effect might be mitigated by the paper’s finding also that institutional investment spurred local employment by way of construction jobs were it not also for the finding that rents in affected areas also rose.

The full report is available to subscription clients. To find out how you can sign up for the service, click here.