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A Sign The Housing Market Has Hit Bottom? JP Morgan Plans To Acquire $1 Billion In Single-Family Rentals

There’s a new player in the single-family rental market — a joint venture between Haven Realty Capital and institutional investors advised by JPMorgan Chase & Co. (NYSE: JPM) — that aims to acquire and develop $1 billion worth of single-family rental communities.

The partners are seeding the venture with three communities in the Atlanta area totaling approximately 250 homes and are set to deploy $415 million in equity to acquire more than 2,500 houses. The partners will look at communities of 50 to 200 homes in the Sun Belt.

“The for-sale housing market has been significantly hampered by recession fears, inflation and rising interest rates placing a burden on homebuilders and their ability to add to the housing stock,” Sudha Reddy, founder and managing principal of Haven, said in a press release.

Data from Redfin shows that the median sale price for homes in the U.S. fell nearly 6.2% from May to September this year, while the number of homes sold fell by almost 16% over the same period.

However, some U.S. markets appear to be leveling out or even rebounding. The median sale price in Miami fell by only 0.2% from September to October while Atlanta actually saw an increase of over 9.7%.

Despite the common fears of a housing market crash, some experts believe talks of a crash are mostly hype. Ryan Frazier, CEO of Arrived Homes, told Benzinga, “It's impossible to predict the future, but concerns about a housing crash are over-exaggerated. While many markets will see price decreases, we don't see another 2008 crash repeating. There is plenty of institutional capital backing the market, and current homeowners should be able to service their debt given the tighter credit requirements, unlike in 2008.”

Regardless of home prices, investment companies like Arrived and Haven are mainly focused on the strength of the rental market. While the median sale price for homes in the U.S. fell 6.2% from May to September, the median monthly rent price fell by only 0.2%, according to data from Rent.com.

Eric Kim, Haven’s managing director and head of capital markets, added, “The fundamentals of the single-family rental industry remain solid, and J.P. Morgan believes, as we do, in the strength and viability of the asset class along with our ability to execute.”

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