Institutional Buyers: Temporary Sideline Stint in Housing Market
Institutional buyers in the housing market have temporarily paused their purchasing activity due to spiked interest rates and a lack of homes for sale. However, signs of another surge are emerging, with companies like MetLife Single Family Rental Fund and J.P. Morgan Asset Management securing significant capital for investment. The differences between the single-family rental space and the build-to-rent space include cheaper debt and the ability to create supply in the latter. Opportunities in the next five years include investing through local operators and the growth of the home equity investment space. Institutional buyers are often criticized for driving up home prices, but they fill a need by providing well-maintained rental homes and make up only a small portion of the rental housing stock. The housing finance system is broken, and private investors are crucial for providing housing in the country.
