Institutional Investors Retreat from SFR Acquisitions But Maintain Pricing Sway Article originally posted on Globe St. on September 18, 2025 Institutional investor appetite for single-family rentals has notably cooled, yet the purchasing power of these investors remains a pivotal force, keeping certain segments of the market out of reach for traditional consumers. Even as the market resets, investor firepower continues to help buoy prices despite rising for-sale inventories and a growing trend of price reductions in both single-family and multifamily sectors, according to Ivy Zelman—who, as executive vice president of research and securities at Zelman, a Walker & Dunlop Company, addressed these trends during a recent housing market webinar. Zelman noted that institutional activity in the single-family space surged in prior years but has begun to wane as higher borrowing costs erode returns. The shift is measurable: many operators have paused aggressive acquisition plans, and increased supply—especially from new construction and build-for-rent deals—has begun to exert downward pressure on rents and sale prices. Still, when properties are listed, institutional buyers have a clear edge. “They have better buying power today than consumers do that are stretched and affordability is so elevated,” Zelman said. The result is a reshuffling of competition, with investors able to transact on bulk acquisitions or higher-priced deals, while typical homebuyers remain sidelined by tighter lending and affordability constraints. The current environment is shaped by several interconnected forces. Inventories are rising not only because of resale listings but also due to more motivated sellers, including those offloading second homes or relocating for job-related reasons. Homebuilders, particularly in select Sun Belt markets, are contributing significant supply, often resorting to incentives and price reductions to spur sales amid sluggish demand. Zelman pointed out that in markets with heavy builder activity, “new home prices are down about net 4%, including significant incentives.” In these areas, both single-family and multifamily sectors are experiencing pricing headwinds, especially where migration trends associated with the pandemic have now reversed or normalized. While institutional acquisition volume is down, the presence of these buyers still distorts normal price discovery. Even as some portfolios are trimmed—one operator notable for putting thousands of Midwestern homes up for sale, with about half purchased again by other investors—market dynamics continue to favor those with capital and agility. The lagged adjustment in asking prices, especially by investors less motivated to sell quickly, underpins the persistence of higher price points in certain submarkets. Looking ahead, Zelman’s team anticipates further volatility. While selective price declines are occurring, she projected only a modest 0.8% national price dip for 2026, with high divergence across regions. The interplay between buyer power, inventory turnover and affordability will continue to define the landscape. For seasoned commercial real estate investors, the message is clear: institutional firepower may have eased, but its market impact endures, maintaining a higher floor for prices even as broader corrections work through the system.