One of the largest single-family home landlords in the U.S. says it will stop buying properties in Fresno and almost 40 other cities, becoming the latest institutional investor to back away from an overheated housing market.
The announcement by Home Partners of America comes just as more Wall Street firms are realizing that an intensifying housing correction could translate into falling home prices. Recent reports warn that U.S. home prices are at risk of falling by as much as 20% more over the coming year.
“We assessed several factors such as home price appreciation, state and local regulations, and market demand to guide our investment plans to best serve consumers. We hope to resume purchasing homes in these markets in the future,” wrote Home Partners of America in a press release.
Home Partners operates in more than 80 markets. The company stands out from other large single-family landlords because it’s designed to give tenants a pathway to homeownership. Customers apply for the program and, if approved, can submit homes they would like to eventually buy. Home Partners purchases the property in cash, then rents it to the customer, who gets the right to purchase the home at a predetermined price.
Some analysts speculate that the company will wait for prices to stabilize at lower prices in the affected markets before resuming purchases. Home Partners say it will keep buying homes in other communities across the country.
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