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Rapid Withdrawal: Institutional Homebuyers Scale Back in the U.S. Housing Market

An analysis conducted by John Burns Research and Consulting reveals a significant decline in home purchases by institutional investors, who own more than 1,000 homes. In January and February of the current year, they bought 90% fewer homes compared to the same period in 2022.

An example that highlights this trend is American Homes 4 Rent, a Las Vegas-based company. During the first quarter of 2023, they sold more single-family homes (666) than they acquired (312). Consequently, their portfolio decreased from 58,993 rental homes across the country to 58,639 homes.

Contrastingly, in the first quarter of 2022, American Homes 4 Rent purchased 1,131 homes while only selling off 171 homes. This was during the height of the Pandemic Housing Boom when institutional investors were eager to take advantage of low interest rates, readily available capital, surging rents, and skyrocketing home values. These favorable conditions made it too enticing for mega investors to abstain from buying properties.

Recent developments have revealed that Invitation Homes, the largest owner of single-family rental homes in the United States, has shifted its strategy to become a net seller. In the first quarter of 2023, the company purchased 194 homes while selling off 297 homes. As a result, Invitation Homes’ portfolio experienced a decline from 83,113 single-family homes to 83,010 homes.

This marks a significant departure from the situation a year ago. During the first quarter of 2022, Invitation Homes, which received support from Blackstone before their divestment in 2019, acquired 822 single-family homes and only sold off 147 homes.

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