(Bloomberg) — Home Partners of America, the single-family landlord owned by Blackstone Inc., will stop buying homes in 38 US cities, becoming the latest institutional investor to back away from an overheated housing market.
The company, acquired by Blackstone in June 2021 for $6 billion, told customers that as of Sept. 1, it is pausing applications and property submissions in Boise, Idaho; Fresno, California; Memphis, Tennessee, and 25 other areas. It will go on hiatus in 10 additional cities on Oct. 1.
“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,” Home Partners said in an announcement on its website. “We hope to resume purchasing homes in these markets in the future.”
Blackstone, in a statement, said it and Home Partners continue to actively buy homes in more than 20 of the country’s highest-growth markets. “We are pausing in markets that represent less than 5% of our recent activity,” the company said.
Home Partners, which operates in more than 80 markets, 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.
Under the new policy, customers who have been approved but don’t submit a home by the cutoff date will be withdrawn from the program and have their application fee refunded, according to the announcement.
Home Partners isn’t first large investor to back away from the US housing market, which reached a frenzied state during the first half of the year. Invitation Homes Inc., American Homes 4 Rent, and KKR & Co.’s My Community Homes are among landlords that have slowed purchases during a period of high home prices and rising financing costs.
Home Partners isn’t acquiring homes in the Minneapolis-St. Paul suburbs of Champlin and Maple Grove, according to the company’s website. Earlier this year, both municipalities passed regulations that made it harder for single-family landlords to operate. The company continued operating in other Twin Cities suburbs.
(Updates with comment from Blackstone in fourth paragraph.)
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