Institutional homebuyer Yieldstreet, known for its single-family rental investment strategy, has seen a significant reduction in its home acquisition levels in the second half of 2022. The company has cited increased interest rates and high house prices as the main factors impacting its potential returns.
As of July 2023, Yieldstreet has not made any new home purchases and has instead focused on selling homes. Approximately 10 homes have been sold so far, highlighting the shift in their investment strategy.
Tejas Joshi, the director of single-family residential at Yieldstreet, believes that national home prices have reached their lowest point and does not anticipate major declines in most markets. Joshi is optimistic that a decrease in interest rates in the future will improve returns and attract more institutional home buyers.
Yieldstreet has set an ambitious goal of growing its single-family home portfolio from $200 million to $1.5 billion by 2028, representing a 650% increase. However, they are not alone in facing challenges in the market. Other institutional homebuyers, such as American Homes 4 Rent and Invitation Homes, have also been net sellers in 2023.
Invitation Homes, another major player in the institutional homebuying market, plans to resume its role as a net buyer in the third quarter of 2023. They recently acquired a portfolio of nearly 1,900 homes for approximately $650 million.
Experts suggest that stabilizing the debt markets and increasing the supply of resale homes could stimulate another surge in institutional homebuying. Despite the current slowdown, industry experts remain optimistic and believe that the institutional homebuying market will bounce back in the future.
Overall, Yieldstreet’s decision to reduce home acquisition levels reflects the challenges faced by institutional homebuyers due to increased interest rates and high house prices. The hopes of industry experts are pinned on a decrease in interest rates and an increase in resale home supply to revitalize the market.
