Institutional home buying remains constrained—just look at this chart

Are you a housing investor? Do you own a long-term or short-term rental property? 🏠

If so, you’re invited to participate in the ResiClub-Groundfloor Housing Investor Survey.

The survey results will be published later this month in ResiClub—and in other mainstream publications.

Last month, Parcl Labs released a new product that provides the public with direct access to their housing data API. For today’s issue, ResiClub queried directly from the Parcl Labs API to see where institutions bought the most homes in May 2024, and where institutions operators sold off the most homes.

The big picture finding?

Despite viral tweets and TikToks claiming otherwise, institutional homebuying in 2024 still remains fairly constrained.

Look no further than Las Vegas, where institutional buyers—those owning at least 1,000 homes—bought 322 homes in May 2024, according to the Parcl Labs API. However, they also sold off 299 homes in May. On a net basis, institutional operators in Las Vegas added 23 homes in May.

While there’s still an appetite to push capital into the build-to-rent sector, institutional scatter-site home buying (i.e. when investors buy up individual homes in the resale market) has been subdued ever since spiked mortgage rates put out the Pandemic Housing Boom’s institutional frenzy. And while Opendoor remains active, the iBuyer category is also still far below its pandemic height.

According to John Burns Research & Consulting, institutional buyers owning over 1,000 homes, including some giant iBuyers, made up just over 3% of all home purchases at the height of the Pandemic Housing Boom in early 2022. Over the past year, these same institutional buyers have accounted for just around 1% of transactions.

If you’d like to see the spreadsheet of all the data in the chart above, click here. If you’d like to see the code ResiClub used to run the analysis in the Parcl Labs API, click here.

After hours on Monday, Lennar reported that it had 21,293 net new home orders in Q2 2024. That’s up +19% on a year-over-year basis.

Lennar—a homebuilder ranked No. 126 on the Fortune 500—net new home orders by quarter:

Q2 2019: 14.5k homes

Q2 2020: 13.0k homes (“COVID-19 lockdowns” quarter)

Q2 2021: 17.1k homes

Q2 2022: 17.7k homes

Q2 2023: 17.8k homes

Q2 2024: 21.3k homes

"Although affordability continued to be tested by interest rate movements and simultaneously challenged consumer sentiment, purchasers remained responsive to increased sales incentives, resulting in a 19% increase in our new orders… The macroeconomic environment remained relatively consistent with employment remaining strong, housing supply remaining chronically short due to production deficits over a decade, and demand strength driven by strong household formation. We remained focused on consistent production pace driving sales pace, while using pricing, incentives, marketing spend and margin adjustment to enable consistent sales volume in a fluctuating interest rate environment,” wrote Stuart Miller, co-CEO of Lennar, in their earnings release on Monday.

Tomorrow, Lennar is having its earnings call at 11 AM ET (sign up here), while KB Home's earning call will be at 5 PM ET (sign up here). In particular, I’m interested to hear what they say about Florida, where inventory has climbed a lot over the past year.

The U.S. unemployment rate has ticked up from a cycle low of 3.4% in April 2023 to 4.0% as of May 2024.

Below is a map showing the latest unemployment rate by state (state data for May comes out later this week).

ResiClub PRO members got these 3 additional articles last week

Fresh home price analysis spanning 800 metros and 3,000 counties

Zillow vs. Moody's: Updated home price forecasts for around 400 housing markets

These state economies are the most dependent on homebuilding