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Explore our Real Estate Indexes

The Easy Way To Invest in Real Estate

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  • Alex Pettee, CFA

Single-Family Rental REITs: Save The Gloom And Doom

  • Single-Family Rental REITs have uncharacteristically lagged this year- dipping by more than 30% - swept up by stiff headwinds across the housing industry from the historic surge in mortgage rates.

  • While residential rent growth has moderated significantly over the past quarter from the record double-digit levels seen earlier this year, the recent gloomy narrative on SFR REITs appears unwarranted.

  • While multifamily markets are poised to face supply headwinds from a recent surge in new development, homebuilders have pulled back from an already historically supply-constrained single-family market.

  • Cooling home price appreciation and tightening credit conditions is indeed bad news for many new “start-up” entrants into the SFR scene that are learning the hard way that the SFR game is a capital-intensive business that requires significant scale to operate profitably.

  • Despite the sharp rate-driven housing cooldown, household formations have actually accelerated this year, lifted by historic levels of inbound immigration and an uptick in birth rates - challenging two core tenants of housing skeptics' prognoses.

 

REIT Rankings: Single-Family Rentals

In the Hoya Capital Single-Family Rental Index, we track the three major SFR REITs: Invitation Homes (INVH), American Homes (AMH), and Tricon Residential (TCN) along with newly-listed Bluerock Homes (BHM) - a recent Blackstone spin-off. We also track NexPoint Diversified (NXDT) - which converted to a REIT from a closed-end fund this year - and owns minority interests in Vinebrook and NexPoint Home Trust.


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Disclosure: Hoya Capital Real Estate advises two Exchange-Traded Funds listed on the NYSE. In addition to any long positions listed below, Hoya Capital is long all components in the Hoya Capital Housing 100 Index and in the Hoya Capital High Dividend Yield Index. Index definitions and a complete list of holdings are available on our website.

Hoya Capital Research & Index Innovations (“Hoya Capital”) is an affiliate of Hoya Capital Real Estate, a registered investment advisory firm based in Rowayton, Connecticut that provides investment advisory services to ETFs, individuals, and institutions. Hoya Capital Research & Index Innovations provides non-advisory services including market commentary, research, and index administration focused on publicly traded securities in the real estate industry.


This published commentary is for informational and educational purposes only. Nothing on this site nor any commentary published by Hoya Capital is intended to be investment, tax, or legal advice or an offer to buy or sell securities. This commentary is impersonal and should not be considered a recommendation that any particular security, portfolio of securities, or investment strategy is suitable for any specific individual, nor should it be viewed as a solicitation or offer for any advisory service offered by Hoya Capital Real Estate. Please consult with your investment, tax, or legal adviser regarding your individual circumstances before investing.


The views and opinions in all published commentary are as of the date of publication and are subject to change without notice. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Any market data quoted represents past performance, which is no guarantee of future results. There is no guarantee that any historical trend illustrated herein will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that any outlook made in this commentary will be realized.


Readers should understand that investing involves risk and loss of principal is possible. Investments in real estate companies and/or housing industry companies involve unique risks, as do investments in ETFs. The information presented does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes.


Hoya Capital Real Estate and Hoya Capital Research & Index Innovations have no business relationship with any company discussed or mentioned and never receives compensation from any company discussed or mentioned. Hoya Capital Real Estate, its affiliates, and/or its clients and/or its employees may hold positions in securities or funds discussed on this website and our published commentary. A complete list of holdings and additional important disclosures is available at www.HoyaCapital.com.

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