For a while now the conventional wisdom on real estate has been that while home prices might not fall much more, they aren’t likely to go up anytime soon either. The best personal finance advice, then, when it came to buying a house, was to buy as little as possible.

Apparently, though, on Wall Street that common wisdom about home prices is not held by all, or even many. In the past six months or so, a number of investment firms, hedge funds, private equity partnerships and real estate investors have turned into voracious buyers of single-family homes. And not just any homes, but foreclosures. Investment banks, who also want in on the action, are lining up financing options to keep the purchases going.

Take for instance private equity mega-firm Blackstone Group (BX). About a year ago, when the NY Observer profiled the firm’s head of real estate Jonathan Gray, there was no mention of single-family homes or even that the firm was looking to profit from a rebound in the residential real estate market.

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Last week, Gray said Blackstone now owns 2,000 single-family homes. At $300 million, that might be small compared to Blackstone’s overall real estate portfolio of about $50 billion. But it’s one of the biggest piles of homes ever intentionally put together (banks and Fannie and Freddie are sitting on many more foreclosed homes, but that’s a different story) by an institutional investor, and it’s likely not the largest portfolio out there these days.

Buying up single-family homes as an investment is nothing new. It’s what landlords do all the time. But landlords have always tended to be mom-and-pop outfits often not owning more than a few dozen units confined to one area. Large Real Estate Investment Trusts and private equity funds generally focused on apartment buildings and commercial real estate, like malls and office buildings. That appears to be changing.

Kenneth Rosen, a UC Berkeley professor who has a consulting firm that advises real estate investors, says he knows of two dozen investment funds in the process of buying up single family homes, a number of which are hoping to own as much as 10,000 homes around the country. He predicts there could be as many as a dozen public REITs in the next few years that are devoted to single family homes.

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The funds aren’t betting on home prices shooting up. The hope is to buy foreclosed homes at a discount, fix them up, and then rent them for a profit. But Blackstone’s Gray says his firm’s plan is to eventually sell the houses for a profit when the economy improves to the point where those who have become renters can afford to buy again, or when the banks really start lending again.

And that could look bad for Wall Street. Undoubtedly, to some this will once again be financiers making money off the bust they helped create, especially since some of the people who are now lining up to buy foreclosed homes helped create the some of the worst mortgage bonds, or bet against them. What’s more, Harvard professor Matthew Desmond believes that Wall Street firms will band together and work to jack up rental prices on houses they minimally maintain.

But without any evidence, it’s probably a little too early to condemn Wall Streeters as slumlords. And no matter how many houses they buy up, fixing rental rates in the huge housing market will be much harder than manipulating Libor. What’s more, the best thing that could happen for the economy right now is probably for the overhang of foreclosed homes to disappear, even if it doesn’t immediately lead to rising prices. So this might prove to be an instance where Wall Street ends up doing what it’s supposed to do, allocate needed capital to an undervalued sector of the economy, helping everyone in the process.

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But perhaps the most interesting thing here is what this says about the value of your house. A report from Goldman Sachs earlier this year predicted that investors could generate 8% investment returns by buying up, fixing up and renting out homes. You have to pay for a mortgage. But still it probably means that buying a home right now or even owning the one you have, as long as you didn’t overpay too badly, is a pretty good investment at a time when 10-year Treasury bonds are paying out 1.5%, and investment yield in general is hard to find. We could be finally planting the seeds of a rebound.