High rent growth and inflation are just a few of the driving factors for a major rise in housing capital, according to the Burns Single-Family Rent Index™ (BSFRI).
Investor and capital transactions from 2020 are a result of a massive increase in single-family rent growth with over $30 billion in capital targeting US rental housing.
Capital is flooding in for a host of great reasons:
- Worldwide bond yields are at historic lows, and investors need yield.
- Inflation is on the rise, and most investors view rental homes as an inflation hedge.
- Record high rent growth (see chart below) is supported by high occupancy rates.
- Renters have demonstrated that they are willing to pay a premium to rent in a new home neighborhood managed by a professional landlord. While the news headlines and NIMBYs are busy bashing institutional owners, many renters are clearly enjoying a better rental experience living with renter (instead of homeowner) neighbors and having no fear that their landlord might decide to sell the home sometime soon.
Single-family rents have grown 6% in the last year per our Burns Single-Family Rent Index™ (BSFRI). This is the highest growth in the 35 years of data we have compiled. The BSFRI is a weighted average of rental home rents in the 63 major single-family rental markets we track.