Almost seven years after the financial crisis, bond investors are rediscovering their appetite for new debt tied to the U.S. housing market.
Issuance of home-loan securities that don’t have government backing has accelerated this year to more than $32 billion from $18 billion a year ago, according to data compiled by Bloomberg and Bank of America Corp. This time around, investors are mainly buying types of bonds that weren’t around when the debt helped spark the crash, such as securities tied to defaulted mortgages and rental homes.
The recovery in housing is luring investors back to a market that unraveled amid soaring defaults and tumbling home prices. The revival is helping to reduce taxpayers’ risks and boost the profits of private-equity firms, real estate investment trusts and hedge funds — and is poised to do more to aid home buyers.
“The market’s healing,” said Chris […]