Housing math wasn’t mathing for many in 2023. Mortgage rates, home prices, and low inventory levels made it both unattractive and increasingly difficult to buy a home in the U.S. It was a far cry from the Pandemic Housing Boom and an institutional homebuying frenzy just three years before. The era of historically low interest rates, easy access to capital—as well as rising rents and home prices, all led to a frozen housing market for both consumers and institutional investors. But a major multibillion-dollar acquisition announced Friday could be a signal that the institutional homebuying market is awakening from its slumber.

Private equity giant Blackstone announced Friday it was buying Tricon Residential, a Toronto-based landlord that owns 38,000 homes across the U.S. for $3.5 billion. It’s comparable to Blackstone’s prior deal from 2021 for Home Partners of America, which owned more than 26,000 properties, for $6 billion. The deal announced Friday launches Blackstone into one of the top institutional homebuyer spots in the country, just behind Progress Residential and Invitation Homes, according to data from Parcl Labs, a real estate data and analytics company.

The vast majority of Tricon’s rental homes are in Atlanta, Jason Lewis, co-founder of Parcl Labs told ResiClub co-founder and former Fortune real estate editor Lance Lambert in a podcast on X (formerly known as Twitter) on Friday. Tricon owns 7 million units in Atlanta and other major markets include Charlotte, North Carolina; Tampa, Florida; Dallas, Phoenix, and Houston.

History is also somewhat repeating itself with the Blackstone deal. The firm led a charge across Wall Street in buying homes after the U.S. foreclosure crisis in 2008. It was one of the first big investment firms to buy homes in bulk in the aftermath of the subprime mortgage crisis. After Blackstone agreed to pay $11.25 a share in cash for Tricon, Tricon shares jumped more than 28% to $11.07 at the close of Friday trading.



A recent history of institutional homebuying

The institutional homebuying market was cooking before 2023. When mortgage rates and home prices were low, investors scooped up rental properties with a lower buy-in.

“The institutional side of the market saw a huge boom during the pandemic,” Lambert said in the podcast. “There was a frenzy—low interest rates, home prices were ripping, rents were ripping, [there was] easy access to capital. It was really a perfect storm for capital flowing into the single family housing market.”

That led to more institutional homebuyers like Tricon buying in major markets including Charlotte, Tampa, Dallas, Phoenix, and Houston, he explained. But when mortgage rates hit 8% in October 2023, investments weren’t as lucrative.

“Once rates spiked the math was less enticing for the institutional players,” Lambert said. “We've seen a big pullback in institutional buying and there are a good number that have more dispositions than acquisitions.”

Lewis predicts that we’ll see more institutional homebuying consolidations in 2024.

“There is enormous variation in how these portfolios are run, and that deals with the level of sophistication with using data and analytics,” Lewis told Lambert. “That was fine when the housing market was a raging bull. And that's becoming more of an acute pressure on portfolios that do not really have sophisticated or mature operational efficiencies. So I would imagine there will be other forms of consolidation throughout 2024 in deals like this.”

This story was originally featured on Fortune.com