Residential property values in the U.S. rose at a decelerating pace in late 2025, with new data showing a 3.2% year-over-year increase in single-family home prices—the lowest growth rate since 2021. This shift follows a significant reduction in private equity investment in single-family housing units.
- U.S. single-family home prices rose 3.2% year-over-year in Q4 2025, the slowest growth since 2021.
- Private equity acquisitions of single-family homes declined by 41% from 2024 to 2025.
- Invitation Homes and American Homes 4 Rent reported 37% and 29% drops in new acquisitions, respectively.
- In Austin, private equity’s share of the single-family rental market fell from 12% to 7.3% between 2024 and 2025.
- Mortgage applications for home purchases increased 11% in November 2025 compared to the prior year.
- The Federal Reserve has cited housing affordability as a key factor in future policy planning.
A slowdown in U.S. home price appreciation has emerged as private equity firms scale back their acquisition of single-family homes, a trend that began in late 2024 and intensified through 2025. According to revised data from the Federal Housing Finance Agency, the national home price index rose 3.2% year-over-year in Q4 2025, down from 5.4% in the same period a year earlier. This marks the slowest pace of growth in over four years, signaling a transition in homeowner demographics and capital allocation. The decline in price momentum correlates with a 41% reduction in private equity purchases of single-family homes from 2024 to 2025. In 2023, these firms acquired approximately 245,000 units, but that figure dropped to 144,000 in 2025. Major players such as Invitation Homes and American Homes 4 Rent reported a 37% and 29% year-over-year decline in new acquisitions, respectively. The shift reflects tighter lending conditions, rising interest rates, and regulatory scrutiny that have reduced the financial viability of large-scale rental portfolios. The broader impact includes a contraction in rental supply in major metropolitan areas, particularly in Sun Belt cities like Phoenix, Austin, and Tampa. In Austin, Texas, where private equity firms once controlled nearly 12% of the single-family rental market, that share dropped to 7.3% by late 2025. Meanwhile, homeowner demand has increased as buyers seek long-term stability, with mortgage applications for home purchases rising 11% in November 2025 compared to the previous year. Market analysts suggest the retreat of private equity may lead to a more balanced housing ecosystem, reducing rent inflation and increasing homeownership opportunities. However, some policymakers warn that a rapid exit could disrupt rental availability in regions heavily reliant on institutional landlords. The Federal Reserve has indicated that housing affordability remains a focal point for future monetary policy decisions.