Investor Intel: SFRs are Sizzling

Contributing Writer, B2R Finance | News

Time to break out the sunscreen, investors. Summer is in full swing and a number of reports out this week suggest that the single-family rental market is sizzling as well. Let’s dive in:

  • A new whitepaper from the National Home Rental Council points to continued growth in the SFR sector. The study concluded that single-family rentals are likely to capture roughly 37 percent of the estimated 3.9 million new renter households coming to market over the next five years. This growth translates into approximately 1.5 million new units of SFR demand between 2016 and 2020. The report also finds that revenue growth for the industry should exceed apartments modestly (3.0 percent vs. 2.7 percent) over the next five years. HousingWire has more on the study here.
  • Home price appreciation is on the rise. The latest Home Price Insights Report from CoreLogic found that including distressed sales, the U.S. has experienced 51 consecutive months of year-over-year increases. Seventeen states reached new highs in April: Colorado, Hawaii, Iowa, Kansas, Kentucky, Louisiana, Maine, Montana, North Carolina, North Dakota, Nebraska, New York, Oregon, Tennessee, Texas, Washington and Wyoming. Rising prices could be good news for those investors practicing a buy-and-hold strategy and banking on appreciation. Here’s a past post on calculating appreciation.
  • Moody’s is out with commentary on the health of the SFR market. The report highlighted data from the Census Bureau which noted that the rental vacancy is now at 7 percent, down from 11 percent in 2009. According to Moody’s, the “drop in vacancy bodes well for the SFRs that we rate, especially regarding anticipated future enhanced rental revenue as Gen Y renters are a large component of SFR renters. This also portends higher liquidation proceeds on potential sales of SFR properties.” For more on this report from DS News, click here.

We’ll leave you with another piece of good news: Zillow is rolling out an update to the Zestimate’s automated valuation model (AVM) designed to increase the accuracy of
Zestimates nationwide. This is welcome news for those investors who use the tool to check out potential investments, do research on various MSAs or even calculate market rent on their properties. For more on the updates, check out this article from Inman News.

Summer is off to strong start indeed!

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