Institutional homeowner consolidation: Maymont Homes expands footprint by absorbing troubled Divvy Homes

Institutional operators, which own around 1% of the U.S. single-family housing stock (1 in 100 homes), have significantly slowed their scatter-site homebuying since spring 2022, as spiked home prices, spiked interest rates, decelerated rent growth, higher carrying costs, and increased construction/maintenance costs have weakened returns. Amid this shifted landscape, some institutional homeowners have seen their business models tested, leading to more consolidation and institution-to-institution portfolio sales.

Look no further than rent-to-own firm Divvy Homes, which is being sold off to Maymont Homes, a division of Brookfield Properties, according to Fast Company. The “fire sale” marks a dramatic fall for the San Francisco-based company, which was previously valued at nearly $2 billion and backed by marquee investors like Andreessen Horowitz and Tiger Global Management.

ResiClub sent readers an update about the transaction earlier this week, but at the time, we weren't able to answer two key questions: How many single-family homes does Divvy Homes own? And how many homes will Maymont Homes own once the deal is completed?

To find out, ResiClub reached out to Jason Lewris at Parcl Labs, a fast-growing residential real estate data startup. Anyone can directly access the Parcl Labs API, which I’ve used in the past to tell stories on everything from where institutional firms are buying and selling, to builder square footage, and more.

According to the latest Parcl Labs data, Divvy Homes owns 4,930 homes, with its greatest metro-area concentration being in Atlanta, GA (1,571 homes); Cleveland, OH (524 homes); Houston, TX (480 homes); Dallas, TX (430 homes); and Tampa, FL (172 homes).

According to the latest Parcl Labs data, Maymont Homes owns 9,954 homes, with its greatest metro-area concentration being in Birmingham, AL (1,339 homes); Augusta, GA (902 homes); Cincinnati, OH (879 homes); Columbia, SC (700 homes); and Jackson, MS (700 homes).

Before any dispositions, taking over Divvy’s 4,930-home portfolio would bring Maymont’s total to 14,884 homes. For perspective, American Homes 4 Rent wholly owns 59,902 single-family homes and Invitation Homes wholly owns 84,640 single-family homes.

Neither Divvy Homes nor Maymont Homes responded to ResiClub’s media request. While we cannot verify this, a few industry insiders believe Maymont Homes’ purchase is likely an asset acquisition play and could result in the winding down of Divvy’s rent-to-own business.

Launched in 2017, Divvy Homes offered a rent-to-own model where customers could select a home, which Divvy would purchase. Customers would then rent the home while contributing a portion of their monthly payments toward a future down payment. With a three-year timeframe to purchase the home at a predetermined price.

The business started to take off. Over four years, Divvy raised more than $400 million in venture capital, alongside $1 billion in debt financing. By 2022, the company was on track to surpass $100 million in annual revenue.

However, rapid growth brought operational challenges and a surge in customer complaints. When mortgage rates spiked in 2022, the monthly payments required from new Divvy renters became too high and increasingly misaligned with local rent levels, undermining the company’s value proposition. Once touted by Divvy Homes CEO Adena Hefets as resilient to economic swings, Divvy Homes—by late 2023, with a portfolio of around 7,000 homes—had gone through three rounds of layoffs and had pretty much stopped acquiring homes.

A single-family rental industry insider told ResiClub on Monday that as of last week just about “everyone [at Divvy] has been laid off minus a small team who works on dispositions… [it’s] a bloodbath for investors and employee equity."

The source added that: “the price Divvy paid for the homes three to four years ago plus current interest rates make it impossible for the occupants of the home to be able to afford to buy it from the company. Divvy needed to be able to price a house three years into the future, to set a buyback price for the tenant, that became impossible so they stopped buying homes.”

National home price update

This week, we learned that U.S. home prices, as measured by the Zillow Home Value Index, fell -0.3% month-over-month between the November 2024 reading and the December 2024 reading.

Year-over-year (i.e., calendar year 2024): +2.6% 

Since 2022 peak: +1.8% 

Since March 2020: +43.5%

Pulte heads to D.C.

On Thursday, President-elect Donald Trump announced his nomination of Bill Pulte as the director of the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac. These entities have been under U.S. government control since 2008.

Bill Pulte is the former chairman of PulteGroup, a major homebuilder currently ranked No. 255 on the Fortune 500, and the grandson of the late William Pulte, who founded the company.

Bill Pulte is also a ResiClub PRO member and reader. I’ll reach out and see if he’s willing to do a Q&A with ResiClub, so we can better understand the direction he’d like for the FHFA and the future of Fannie Mae/Freddie Mac conservatorship.

More markets are digging out of the Pandemic Housing Boom inventory hole

Among the nation’s 200 largest metro area housing markets, these 65 metro areas now have active inventory above 2019 pre-pandemic levels.

Last month, it was 59 markets.

ResiClub PRO members can access our latest monthly inventory analysis for +800 metros and +3,000 counties here.

The “5-year change” column below compares active inventory at the end of December 2024 to the end of December 2019.

The beginning of billionaire Brad Jacobs BIG housing market play

As legendary businessman Brad Jacobs' new venture, QXO, went public this week, the company announced an $11 billion cash bid to acquire roofing giant Beacon Roofing Supply.

In December 2023, Jacobs walked ResiClub through his plans to build QXO into a giant in the building materials space through acquisitions—using the playbook he has deployed over the decades to build several billion-dollar firms.

Jacobs told ResiClub that: “I think between the construction of housing that’s going to be necessary in the coming years, and the need to repair and remodel, I think there will be fairly good demand for building products distribution.”

As of today, Builders FirstSource has a $19 billion market cap, and Ferguson has a $34.5 billion market cap. Brad Jacobs aims to make QXO even bigger than those two giants.

"There are $20 and $30 billion dollar players already. Builders FirstSource, you got Ferguson. Great companies, real fine companies. But I’m planning to do something larger than that,” Jacobs told ResiClub in December 2023.