Total institutional investment in the SFR market reached $33 billion by the end of last year, the firm’s paper "U.S. Single Family Rental—Institutional Activity in 2016/2017 reveals.
"Institutional activity in the SFR market continues to increase, driven by relatively attractive valuations, modestly strong home price appreciation and stable financing," said Sandeep Bordia, Head of Research and Analytics at Amherst Capital.
Among key findings of the report:
- Newer entrants and mid-sized institutions have increased market share of institution-owned SFR homes, compared to a buying slowdown among larger institutions.
- Institutional SFR buying shifted geographically to the Southeast and Midwest U.S., away from Western markets prioritized by early SFR entrants.
- Recent institutional SFR activity demonstrates the differences in strategy between public REITS and private mid-sized institutions.
- We believe demand for SFR homes will remain strong.
"Our data shows that newer entrants and mid-sized institutions accounted for the majority of institutional SFR home purchases over the last year, compared to a slowdown in buying activity among larger institutional holders. We believe that evolving demographics, financial factors and shifting consumer preferences, will keep demand for SFR homes elevated over the coming years," added Bordia.
More market update:
The number of US single-family rental homes owned by institutional investors grew to more than 200,000 in 2016 according to a new report from Amherst Capital Management.