Business

Rent Surges on Single-Family Homes With Landlords Testing Market By Bloomberg



© Reuters.

(Bloomberg) –Record occupancy rates are emboldening single-family landlords to hike rents aggressively, testing the limits of booming demand for suburban rentals.

American Homes (NYSE:) 4 Rent, which owns 54,000 houses, increased rents 11% on vacant properties in April, according to a statement Thursday. Invitation Homes (NYSE:) Inc., the largest landlord in the industry, boosted rents by similar amount, an executive said on a recent conference call.

Housing costs are jumping across the U.S. as vaccines fuel optimism about a rebound from the pandemic. With homeownership out of reach for many Americans, rents are also climbing. The increases may add to concerns about inflation pressures as the economy recovers.

“Companies are trying to figure out how hard they can push before they start losing people,” said Jeffrey Langbaum, an analyst at Bloomberg Intelligence. “And they seem to be of the opinion they can push as far as they want.”

Read more: Rents Soar for Millions of Americans as Threat of Eviction Looms

In the early months of the pandemic, the big single-family rental companies slowed rent hikes, preferring to maximize occupancy during an uncertain time for the economy. Now, low vacancies are giving them pricing power.

Invitation Homes reported an occupancy rate of more than 98% during the first quarter, freeing the company to raise prices by more than 10% on vacant houses in April. Invitation Homes is targeting increases of as much as 8% for tenants seeking to renew leases in coming months, an executive said on a recent conference call.

Single-family landlords have had the upper hand over apartment owners in the age of remote work, but those advantages might dissipate as employers summon workers back to the office.

READ  Graduating from college during the pandemic? These business titans have some advice for you

“How much of the demand is temporary?” said Langbaum. “I do believe some component of it will revert back to urban markets.”

©2021 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.