In fact, according to an analysis conducted by John Burns Research and Consulting, institutional investors—those owning over 1,000 homes—bought 90% fewer homes in January and February than they did in the first two months of 2022.

Look no further than Invitation Homes, the largest owner of U.S. single-family rental homes, which recently became a net seller. In the first quarter of 2023, Invitation Homes bought 194 homes while it sold off 297.

That’s a jarring shift. Just a year earlier, in the first quarter of 2022, Invitation Homes—which Blackstone helped to grow before divesting in 2019—bought 822 single-family homes and sold off only 147.

Why are institutional investors like Invitation Homes, which has amassed a portfolio of over 83,000 single-family homes, pulling back so quickly from the U.S. housing market?

The reason: The financial return on each additional home added just isn’t that great right now after factoring in interest rates, house prices, and rents. Plus, some big investors think that national house prices, despite jumping a bit this spring, are poised for another step down.

“We’re pretty much on pause across all [homebuying] strategies,” Tejas Joshi, director of single-family residential at Yieldstreet, which owns over 700 single-family homes, recently told Fortune. “I don’t think [house] prices have bottomed yet… On average, we have another 5% decline nationally, and it’ll vary by market. Peak-to-trough, [we’re expecting] 12% to 15% [national] decline.”

Through the first quarter, Joshi says, Yieldstreet has yet to buy a single home in 2023. That’s despite the fact that Yieldstreet would like to grow its single-family home portfolio from its value right now of around $200 million value to $1.5 billion over the next five years. If the company goes through with it, that would mark a 650% increase in its single-family holdings by 2028.

But it isn’t just about home prices: Interest rates on “floating” loans offered to firms like Yieldstreet are still in the 7% to 8% range, Joshi says. Those high interest rates, coupled with frothy home prices, mean that buying new single-family rentals doesn’t make a lot of sense right now for some institutional investors.

Joshi says Yieldstreet is waiting for either house prices to take another leg down or interest rates to come back down. Or both.

“If short-term [interest] rates came down around 4%, and if home prices were about 15% lower than the peak last year, that is a valuation that supports the equity return that investors need to make,” Joshi tells Fortune.

Want to stay updated on the housing market? Follow me on Twitter at @NewsLambert.