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The U.S. residential real estate industry is in a much different place compared to a few years ago.

Both mortgage interest rates and property prices have risen sharply, making homeownership far less affordable. Cheap houses are hard to find, unless they come with a money pit鈥檚 worth of repairs.

In tandem, the share of renter households is , and the number of home sales on the . Existing homeowners are largely staying put, and would-be homebuyers are finding few desirable, nonexorbitant options.

These market shifts mean more bad news for real estate unicorn startups funded during the boom cycle a few years ago. We鈥檙e seeing this play out with collapsing share prices of several that made it to the public market, such as , and .

Startup investors have also cut back on new real estate-related financings. So far this year, U.S. companies in sectors tied to real estate 1 have raised $3.5 billion in investment across funding stages. That puts 2024 on track to deliver the lowest funding tally in years, as charted below.

We鈥檝e seen particular pullbacks around startups in the mortgage space. With rates higher, fewer homeowners are refinancing. In tandem, funding to companies with the term 鈥渕ortgage鈥� in their 小蓝视频色情网页版 profile totaled less than $140 million in 2023 and 2024, down over 80% from the prior two years.

One-time unicorns focused on mortgages and home closings have also taken a beating. Better.com, which focused on automating the mortgage application process, a 1-for-50 reverse stock split this summer, after shares cratered. , which focused on adding efficiency to the home sale closing process, to title insurer in September after its stock collapsed.

Buying and holding vacant real estate has also become costlier. This apparently hasn鈥檛 helped Opendoor and Offerpad 鈥� two 鈥溾�� businesses optimized for a low-interest rate environment that also have seen their shares crater. Last week, Opendoor laid off 300 employees amid mounting losses.

Private, venture-backed companies have faltered as well. , a Bay Area startup that raised nearly $600 million to reinvent the homebuilding process, shuttered last year and sold its assets to homebuilder . Investment around the broader smart home theme has also weakened, as we chronicled earlier this year.

For commercial real estate, meanwhile, it doesn鈥檛 help that the most famous venture-backed play in this space is undeniably . The co-working company emerged from bankruptcy this summer, effectively wiping out the billions in equity it raised over the years.

All this is to say it鈥檚 not too surprising to see overall real estate-related venture investment is down. Nonetheless, we do still see pockets of active fundraising in areas including rental management, eco-friendly building materials, and tools to simplify construction. In a follow-up installment, we鈥檒l take a look at who鈥檚 getting funded in these and other areas.

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• VCs Have Mostly Shut The Door On Smart Homes

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