Institutional investors (those who own 1,000 or more homes) have been selling off their inventory in 2023. These big investors have reduced their buying activity by nearly 80% from Q4 of 2022 compared to Q4 of 2021, according to John Burns Research and Consulting.
This change in activity has led to 90% fewer purchased homes in January and February of this year than in the first two months of 2022.
This is a sharp contrast to the pandemic purchasing of houses in the U.S. These were times when it was easy to borrow money and interest rates were at rock bottom—coupled with rising rents and soaring home prices making it a perfect storm for institutional homebuyers to add to their portfolios. So, why has the trend reversed?
We’ll take a closer look at the trends of institutional homebuyers, the reasons why they are backing out, and what this means for individual investors.
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