Trump's New Order Benefits Build-to-Rent Developers
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 20h ago
0mins
Source: Yahoo Finance
- Policy Impact: Trump's latest executive order focuses on the U.S. housing market, targeting large institutional investors buying existing single-family homes while exempting build-to-rent communities, indicating support for rental developers.
- Market Shift: As mortgage rates doubled, large rental operators significantly reduced purchases of existing homes in early 2023, shifting towards newly constructed portfolios from major builders like D.R. Horton and Lennar, reflecting rising demand for new rental communities.
- Investment Opportunity: Over 321,000 build-to-rent homes have been constructed nationwide since 2012, with significant growth in the past five years, indicating increasing investor interest in concentrated communities that are cheaper to manage and align with long-term rental demand in high-priced suburbs.
- Political Narrative: The build-to-rent model has largely avoided criticism of crowding out individual buyers, and Trump's exemption reinforces this narrative, even as lawmakers explore broader restrictions on housing investors, suggesting a cautiously optimistic sentiment in this sector.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy INVH?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on INVH
Wall Street analysts forecast INVH stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for INVH is 32.67 USD with a low forecast of 26.35 USD and a high forecast of 38.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
6 Buy
10 Hold
0 Sell
Moderate Buy
Current: 26.350
Low
26.35
Averages
32.67
High
38.00
Current: 26.350
Low
26.35
Averages
32.67
High
38.00
About INVH
Invitation Homes Inc. is a real estate investment trust that conducts its operations through Invitation Homes Operating Partnership LP (INVH LP). INVH LP is engaged in owning, renovating, leasing, and operating single-family residential properties. Through THR Property Management L.P., a subsidiary of INVH LP, and its wholly owned subsidiaries (collectively, the Manager), it provides all management and other administrative services. The Manager provides professional property and asset management services to portfolio owners of single-family homes for lease. It has a vertically integrated operating platform that enables the Company to acquire, renovate, lease, maintain, and manage both the homes it owns and those it manages on behalf of others. The Company’s business activity includes property operations, marketing and leasing, digital marketing initiatives and branding, resident relations and property maintenance, and investment and asset management.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Trump's New Order Benefits Build-to-Rent Developers
- Policy Impact: Trump's latest executive order focuses on the U.S. housing market, targeting large institutional investors buying existing single-family homes while exempting build-to-rent communities, indicating support for rental developers.
- Market Shift: As mortgage rates doubled, large rental operators significantly reduced purchases of existing homes in early 2023, shifting towards newly constructed portfolios from major builders like D.R. Horton and Lennar, reflecting rising demand for new rental communities.
- Investment Opportunity: Over 321,000 build-to-rent homes have been constructed nationwide since 2012, with significant growth in the past five years, indicating increasing investor interest in concentrated communities that are cheaper to manage and align with long-term rental demand in high-priced suburbs.
- Political Narrative: The build-to-rent model has largely avoided criticism of crowding out individual buyers, and Trump's exemption reinforces this narrative, even as lawmakers explore broader restrictions on housing investors, suggesting a cautiously optimistic sentiment in this sector.
Continue Reading
Trump's Order Restricts Institutional Buyers, Boosts Build-to-Rent Market
- Policy Impact: Trump's executive order restricts institutional buyers from purchasing existing homes while exempting build-to-rent projects, potentially accelerating a shift among major investors towards rental housing amidst rising home prices and mortgage rates.
- Market Transition: Over 320,000 build-to-rent homes have been constructed since 2012, with most growth occurring in the last five years, indicating the model's potential to meet tenant demands, especially in areas where home buying is increasingly difficult.
- Investor Preference: Institutional investors like Invitation Homes and Pretium are reducing purchases of existing homes in favor of build-to-rent communities, as managing entire neighborhoods is cheaper than overseeing scattered properties, which could reshape suburban housing dynamics.
- Political Protection: Build-to-rent projects gain political protection by focusing on new construction, with supporters arguing that this model not only expands housing supply but also avoids driving up prices, thereby garnering broader voter support.
Continue Reading