Dive Brief:
- Home Partners of America, the single-family rental arm of New York City-based rental housing giant Blackstone, is pausing acquisitions in 38 markets at the beginning of September, according to Bloomberg.
- Home price appreciation, state and local regulations and market demand drove HPA, which owns over 17,000 houses, to pull back on home purchases in metros like Cincinnati; Detroit; Louisville, Kentucky; Memphis, Tennessee; Milwaukee; and New Orleans, according to The Real Deal.
- HPA isn’t the only SFR operator that has slowed purchasing. Invitation Homes, American Homes 4 Rent and KKR & Co.’s My Community Homes have also purchased fewer homes recently, according to Bloomberg.
Dive Insight:
Blackstone acquired HPA, valuing the company at $6 billion, in June 2021. HPA’s business model is to purchase homes on behalf of its residents. It later provides that renter with the opportunity to purchase the home.
Although it is taking a pause now, HPA said it hoped to resume buying in the markets where it is pausing in the near future.
“We and Home Partners remain fully committed to expanding access to homeownership and continue to actively purchase homes on behalf of our residents in more than 20 of the highest growth markets in the U.S,” a spokesperson for Blackstone told Multifamily Dive in a statement. “We are pausing in markets that represent less than 5% of our recent activity.”
Despite companies like HPA and others taking a pause from the acquisition market, the long-term trend is still for institutions like Blackstone to grab buy more single-family homes.
Institutions own 700,000 SFRs — about 5% of the national stock, according to a research paper from MetLife Investment Management cited in a report from Yardi Matrix. By 2030, MetLife estimates that they will possess 40% of all SFRs — roughly 7.6 million homes.
At the same time, the supply of purpose-built SFR housing is hitting an all-time high with more than 25,000 units under construction in the U.S., according to Yardi Matrix’s SFR database of developments with 50 or more units.
Deliveries are also rising with nearly 4,300 units delivered in the first half of the year. This year should far surpass 2021’s record high of 7,705 deliveries, according to a report from Yardi Matrix.
Demand for SFRs won’t subside anytime soon, according to Yardi Matrix report author Paul Fiorilla. “Given the long-term shortage of single-family homes and the high cost of homeownership, SFR occupancy rates are projected to remain high into the future,” Fiorilla wrote.
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