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Rental Home Investors Are Buying Fewer Homes

Market Data + Trends

Rental Home Investors Are Buying Fewer Homes

As financial returns shrink, major investors such as American Homes 4 Rent and Invitation Homes are pulling back from the rental market

May 16, 2023
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Image: Nastudio / stock.adobe.com

Recent analysis conducted by John Burns Research and Consulting reveals that institutional investors, or those who own more than 1,000 homes, bought 90% fewer single-family homes for rent in January and February 2023 than they did during the first two months of 2022 when the market was seeing a flood of institutional homebuying. Then, low interest rates, soaring rents, and historically high home values created prime purchasing conditions for mega investors, but as interest rates rise and rental prices begin to stabilize at the start of 2023, those big players are pulling back, according to Fortune.

In the first quarter of 2023, American Homes 4 Rent bought 312 single-family homes compared with 1,131 homes purchased just a year earlier, and that’s not the only institutional investor selling more homes than it’s buying in a 2023 housing correction. 

Earlier this month, we learned that Invitation Homes, the largest owner of U.S. single-family rental homes, is also now a net seller right. In the first quarter of 2023, Invitation Homes bought 194 homes while it sold off 297. That net decline saw the Dallas-based company's portfolio shrink from 83,113 single-family homes to 83,010 homes.

That's a sharp reversal from a year ago when in the first quarter of 2022, Invitation Homes—which Blackstone helped to grow before divesting in 2019—bought 822 single-family homes and sold off only 147 homes.

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