New data from Redfin shows the once-hot single-family rental market is cooling off rapidly with investors.
Phoenix was among the seven fastest cooling markets, with purchases having fallen 47.4% year-over-year.
Nationally, year-over-year investor purchases are down 30%.
Redfin blames a combination of high home prices, increasing mortgage rates and a comparative softening in rental markets.
Redfin agents have said large-scale investors buying clusters of five and 10 homes at a time have dried up, as hedge fund backing has disappeared, rents have fallen and housing demand has generally slowed. So called “mom and pop” investors buying individual properties make up a substantial portion of current activity.
A decline in activity for short-term/extended-stay rental outlets like Airbnb has also chilled investor interest. Short-term rental use has fallen off since the pandemic and early post-pandemic phases, and previously bullish investors are looking to shed portfolio assets in the face of the current uncertainty.
Rather than traditional SFR, many investors are turning to or maintaining interest in Build-to-Rent communities, which remain a compelling investment opportunity. (Source)