In December 2023, a startling rumor started to spread on social media — that large institutional buyers had purchased 44% of the available homes on the market in 2023, leaving policymakers concerned with the potentially predatory grip of these entities.
HousingWire lead analyst Logan Mohtashami immediately debunked the claim.
In fact, a recent study published by SFR Analytics shows that purchase activity among institutional buyers significantly decreased in 2023. The 10 largest institutional buyers collectively purchased 1,500 to 3,500 homes per month last year, the study shows. Purchase activity peaked in July, driven by a portfolio acquisition completed by Invitation Homes.
The analysis is limited to resale properties and does not include new construction, which means that build-to-rent activity is excluded.
While it took more than 5,000 acquisitions per year to make it into the top 10 largest single-family rental (SFR) buyers in 2021, the threshold was downsized to 671 in 2023. Zillow, which was the second largest institutional buyer in 2021, exited the home-flipping business in November of that year after failing to accurately forecast the prices for buying and reselling homes.
A variety of companies earned a spot on the top 10 list for 2023, including real estate investment trusts such as Pretium, Amherst, Invitation Homes and Tricon. Two iBuyers, Opendoor and Offerpad, were also on the list.
Choctaw American Insurance was the only lease-to-own company to land on the list. New Western, meanwhile, also stood out as a marketplace for real estate investors.
Opendoor (8,603 homes purchased), New Western (5,233) and Pretium (3,324) reaped the lion’s share of business in 2023, according to SFR Analytics. FirstKey Homes was the only large SFR fund not to be featured on the list.
The hot markets of 2023
Institutional buyers went all in on Dallas in 2023, snagging almost 3,000 homes in the metropolitan area. Atlanta came in second with about 1,900 homes purchased, followed by Houston (1,575) and Phoenix (1,383).
Investors of all sizes purchased 46,419 residential properties in fourth-quarter 2023, according to Redfin data. That amounted to $32.3 billion worth of property, or 10.5% less than in the final quarter of 2022. Meanwhile, total U.S. home purchases fell by 12.2% year over year to 251,462, the lowest fourth-quarter level since 2012, Redfin reported.
To generate its analysis, SFR Analytics leveraged nationwide deed and assessor data to track the single-family rental home market.
