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Single-family landlords look for opportunities in a slow US housing market due to low consumer demand
Posted on June 20, 2022 |
- The single-family landlords are seeking buying opportunities due to low demand in a slow housing market that will give builders a discount.
- At present, builders are offering small settlements on deal terms even as they hold the line on price.
- In the long run, slow price gains and high inventory is good for future buyers but for now, the new conditions are dangerous for homebuilders, who increase costs when houses take longer to sell.
- However, deals with landlords can help builders keep work crews busy and add housing inventory despite slower consumer demand.
- In 2021, Lennar Corp. joined with Centerbridge Partners and Allianz Real Estate to build and obtain over $4 billion worth of rentals and PulteGroup Inc. build 7,500 houses for rental Invitation Homes Inc.
- Landlords will also likely encounter a halt in progress as Interest rates on single-family rental securitizations grew by 5% in a single deal from 2%.
- For residents, wage increases helped decrease rising rents has given landlords the confidence to continue raising prices.
- Invitation Homes, with over 85,000 houses, increased rents by 12% in May compared to 2021 but the average resident paid 18% of their household income on rent, which is lower than the company’s historical average.