Rithm Capital's CEO addressed the housing affordability crisis in the U.S., noting it's a global phenomenon. While acknowledging recent headlines targeting institutional investors owning more than 100 units, the CEO stated that this group owns less than 1% of the total housing stock and is not the primary cause of the affordability issue. Instead, the problem stems from a lack of supply.
Rithm Capital is very bullish on the residential sector, focusing on the multifamily for-rent side and looking to develop. They aim to invest in market-rate and affordable housing, bringing new supply online in both equity positions and construction financing, especially given tight lending standards. They believe this approach can achieve great returns for investors while addressing the housing shortage.
The company is particularly interested in build-to-rent investments, where housing units are specifically constructed for rental purposes. This strategy meets a large demand from "forced renters" who desire access to housing in safe, affordable, and desirable neighborhoods. The CEO highlighted that multifamily is a more established, liquid asset class with clear exit strategies, which is favorable from a real estate perspective.
While leaning towards traditional multifamily, Rithm Capital still sees a place for single-family ownership and rental markets. They prefer locations with population growth and job opportunities. Their investment strategy involves increasing the housing supply, believing it's the only way to solve the affordability crisis and achieve positive returns.
