The Institutional Single-Family Rental (SFR) Market has experienced unprecedented growth over the past ten years. It has been an attractive option for those wary of homeownership, offering features such as predictable cash flow, direct control of assets, and benefits resulting from widespread tenant demand. However, it is now facing a slew of challenges that threatens to impede its success.

Interest rates have undergone a rapid increase, likely in response to inflation and decelerating home prices and rental rates. This so-called ‘double-whammy’ of factors has greatly impacted SFR investments, and businesses are having to navigate their projects with far more caution. It has become increasingly difficult to secure financing at reasonable rates, and the value of those investments have become quite volatile.

Key points:
• Unprecedented growth of SFR market in the past decade
• Attractive for those wary of homeownership
• Rapid increase in interest rates due to inflation, decelerating home prices, and rental rates
• Difficult to secure financing at reasonable rates
• Investments now more volatile

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