For many reasons, institutional investment in single-family rental homes was on a tear, expanding in markets nationwide as potential homebuyers accepted the idea of renting when they couldn't afford high mortgage rates, couldn't find a suitable home or didn't have the funds for a down payment. Renting a home with more space than an apartment, with its own yard and sometimes a shared clubhouse was the next-best choice, and institutional developers were eager to meet their needs. 

But now many of these participants are scaling back so they can focus on improving their operational efficiencies to survive and thrive over the long term, according to Yardi Matrix. Exactly where does this segment stand as it regroups? Institutional SFR investors own about 600,000 SFRs units or 3% of the 17 million single-family rental homes and a small fraction of the 82 million occupied single-family homes. They're found in both scattered-site properties—homes acquired individually—and SFR communities, most built as rentals.

To date this year, institutional purchases have dropped as home sales declined. The segment's activity for now is concentrated in BTR communities and new construction. As a result, future growth is expected to depend on what happens to interest rates, home prices and investor demand for commercial property specialized products like this.