Investors large and small have helped power the housing recovery and drive up prices by nearly 25 percent over the last two years. But institutional investors, who have bought as many as 200,000 homes since prices began to turn upwards, are beginning to pull back.
“The institutional wave has passed,” Jonathan Gray, global head of real estate at Blackstone Group LP, told Bloomberg.
Blackstone’s buying up homes at a pace that’s down 70 percent from last year’s peak, Gray said. Other big players like American Homes 4 Rent, Colony American Homes and American Residential Properties Inc. have also eased up on the pace of aquisitions, Bloomberg reports.
Institutional investors aren’t retreating from the market altogether, however. Even as they slow their own purchases of single-family homes, institutional investors are increasingly lending money to smaller investors keen on buying into the asset class, according to Bloomberg.
Both Blackstone and Colony American, another single-family home investor, plan to package these loans into mortgage-backed securities.