Rent Growth Of Single-Family Rental Homes Are Slowing Down
Institutional investors have been major players in the multifamily space for a lot of decades. Now they’re turning their attention to detached single-family rental homes, the market segment that has been individual owners or small businesses traditionally dominates them.
Publicly traded companies like :
– Invitation Homes (INVH)
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– American Homes 4 Rent (AMH)
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– Tricon Residential (TCN)
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each of those owns tens of thousands of rental homes.
According to a published post by Bezinga, real estate brokerages such as Cushman & Wakefield, Newmark, and CBRE as part of their multifamily services a few years ago they started to focus on the single-family rental sector.
The pandemic has caused single-family rentals as people moved out of their urban apartments to gain a yard and more room to work remotely which accounts for half of the rental housing stock to surge.
Single-Family Rental Homes Are Slowing Down
According to a report from CoreLogic, a global property information and analytics provider, single-family rentals rose its popularity as the pandemic wore on, and demand for families seems to be cooling off. The growth of rental rate for single-family homes decreased to its lowest level since June 2021.
According to the CoreLogic report, the rental price growth of the U.S. dropped to 8.8% nationwide, in more than a year the rate reached its lowest of liking but still three times higher than pre-pandemic levels.
The principal economist at CoreLogic, Molly Boesel said single-family rents decreased again every month in October but they are still up year over year. She added that while rents typically experience a seasonal drop in October, this year’s decrease was larger than average and could point to prices slowing more sharply than expected in the coming months.
CEO of Miami-based ARK Homes for Rent Jordan Kavana said the demand for single-family rentals is unprecedented. Their goal is not only to meet that demand but to develop a housing model that embodies good health and well-being for their residents.
The Ark Homes for Rent housing model seems to be resonating with the people that rent. 80% of the company’s tenants renew after the two-year term expires, a much-increased rate than the average industry apartment renewal of 57%.
Havana said that when you give residents what they want and need and put their health before everything else, you increase the chances that they will remain long-term residents. They are loyal to their residents, and in return, their residents are loyal to them.