Key Insights into the Single-Family Rental Industry
Single-Family Home Rentals on the Rise
by David Howard
The National Rental Home Council (NRHC) serves as the trade association for the single-family rental (SFR) home industry. NRHC members include owner-operators, builders, vendors, and service providers of single-family rental homes across the country.
As part of our mission to provide market research and other tools to guide members through the ever-evolving housing market landscape, below are several key insights which you will find beneficial.
SFR Rent Collections
According to Chandan Economics and RentRedi, on-time payments in properties managed by independent landlords increased for the first time in five months in October 2024. Approximately 85.5% of tenants made their payments on time, reflecting a marginal (+30 bps) improvement from the prior month. However, compared to a year earlier, on-time payment rates still sit lower by 79 bps.
Looking at SFR properties, collections have generally mirrored the all-property type trend. In October, 85.6% of SFR units paid their monthly rent on time — rising 31 bps from September, though remaining down by 52 bps from the same time last year.
Encouragingly, SFR’s forecast full payment rate — which considers already received on-time and late payments, plus expected future late payments based on historical patterns — ticked up again to 95.4% in October. Before improving each September and October, the SFR full payment rate had fallen in six of the previous eight months.
Flock Homes-ResiClub Real Estate Investor Survey
Real estate investors reporting that they are planning to grow their portfolio in the near term varies heavily by region, according to the Flock Homes-ResiClub Real Estate Investor Survey.
While overall, 49% of investors said they plan to grow, that figure was primarily weighed down by investors in the Southwest (36%) and West (31%). At least 50% of investors in other regions showed interest in growth, with the Midwest (62%) leading the way.
Fifty-eight percent of investors reported that maximizing their cash flow is their primary goal, which makes sense when just 24% expected their rent to outpace expenses. Investors’ most significant concerns compared to pre-COVID were primarily over the prices of insurance, maintenance, and property taxes. However, in line with concerns over cash flow, 14% of investors reported concerns over late or delinquent payments.
The National Association of Realtors
The National Association of Realtors reported sales of existing homes fell 1.0% in September to a seasonally adjusted annual rate of 3.84 million units, the lowest level since October 2010. On an annual basis home sales declined 3.5%. The median home sales price increased 3.0% from a year ago to $404,500.
Sales of new single-family houses in September totaled a seasonally adjusted annual rate of 738,000, 4.1% above the August rate of 709,000, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development. On an annual basis, new home sales increased 6.3%. September new home sales reached the highest level since May 2023. The median new home sales price was $426,300.
U.S. Single-Family Home Rentals Rise Amid Housing Market Challenges
According to a report from Minnesota-based date provider IPUMS, the number of renters of single-family homes in the U.S. increased from 14 million in 2020 to 14.2 million in 2023. The report lists high home prices, fluctuating mortgage rates, and limited availability of for-sale homes as factors contributing to the increase.
Housing Supply Shortfall Persists
Up For Growth, a Washington, DC-based nonprofit focused on finding solutions to America’s chronic housing shortage, released its 2024 Housing Underproduction Report this week, pegging the shortage of homes across the country at 3.85 million. The ten markets with the highest levels of underproduction include:
» New York-Newark- Jersey City
» Los Angeles-Long Beach-Anaheim
» Chicago-Naperville-Elgin
» Riverside-San Bernadino-Ontario
» Washington, DC-Arlington-Alexandria
» Miami-Fort Lauderdale-Pompano Beach
» Dallas-Fort Worth-Arlington
» Atlanta-Sandy Springs-Alpharetta
» Boston-Cambridge-Newton
» Phoenix-Mesa-Chandler
