From 2020 to the start of 2022, capital announcements chasing single-family rent growth have risen from $3 billion to over $50 billion, which translates to 125,000 homes at the current resale value of roughly $400,000, John Burns Real Estate Consulting reports. Single-family rental homes and build-for-rent units appeal to investors looking for an inflation hedge with less volatility in the event of a housing boom or bust. Lease effective rents are on the rise, and some markets are reporting double-digit price growth with more gains expected in the coming months.
$50 billion translates into 125,000 homes at today’s median resale value of about $400,000. Since some of this is only the equity investment and excludes the debt (and we know of far more than this that is not public info), we believe the number of homes that could be built and/or purchased far exceeds this. 125,000 homes would be less than 1% of today’s single-family rental homes.
Single-family rental and build-for-rent (contiguous rental home communities) continue to appeal to investors looking for yield and an inflation hedge. Homes should be a hedge against inflation because the cost of their materials is rising while rents should grow along with inflation as well.
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