Our role in the housing market
Insights from Invitation Homes on the single-family rental industry
Invitation Homes is proud to lease and manage high-quality homes in the neighborhoods where people want to live. We serve a small but important role in the nation's overall housing market by providing choice, flexibility and professional service to the growing share of people who choose the ease and savings of leasing versus owning a home.
Our industry has faced challenges as it has grown and evolved, and though we provide a valuable housing option for many people, we are routinely faced with misleading or inaccurate narratives about the nature of our business. When put into context, however, many common claims against the single-family rental industry fall flat.
Below, we list three truths about the housing industry, and how we’re playing a role in each.
The U.S. needs more homes.
Fact #1: An insufficient supply of available single-family homes drives prices higher and makes it harder for people to purchase a house.
According to Pew , the U.S. faces an estimated shortage of 4 to 7 million homes. This is primarily caused by a web of rules and regulations that prevent homebuilding. At the same time, the number of single-family rental homes has been falling every year since 2016.
Insufficient supply cannot be clearly linked to single-family rentals. Professional rental housing providers like Invitation Homes collectively hold only 3% of all single-family rentals, while nearly 80% are linked to landlords that own fifty or fewer properties. In 2023, Invitation Homes also sold more homes than it acquired – acquiring 273 homes and selling 399 – most often to end-user homebuyers. While the number of single-family rental homes has continued to fall, home prices have continued to increase.
Fact #2: Increasing supply in the housing market is only possible if local and state governments create environments that are conducive to development.
As The Hill reports , housing prices keep rising primarily because there’s not enough housing to go around. A top reason for this scarcity is local zoning laws that bar new construction.
Fact #3: Despite headwinds in the market, Invitation Homes is doing its part to increase supply by partnering with homebuilders to build new homes.
Most of our new inventory comes from our build-to-rent (BTR) efforts, not from purchasing existing homes. In fact, we added 648 new homes in 2023 through our build-to-rent program and have roughly 2,000 more in the pipeline.
Fact #4: High mortgage rates have made renting a home more affordable than buying one.
It’s currently more expensive to buy a home than it is to rent. As of the third quarter of 2024, the cost of owning a home is over $1,000 more expensive than leasing on average in Invitation Homes markets. We’re proud to offer a high-quality option for families who prefer the versatility of renting or for whom buying a house is too expensive.
Leasing is a valuable and often preferred option over owning.
Fact #1: Leasing a single-family home is an ideal option for many people who are transitioning between locations, aspire to homeownership, or simply prefer the ease that comes with renting.
Invitation Homes residents typically fall into one of three categories: aspirational, transitional, or preferential. Aspirational residents seek to eventually buy a home but need time in a leasing situation to save up or repair credit; transitional residents are often moving between locations or are trying out a new city or neighborhood to see if it works for them and their family; and preferential residents are those who want to live in a single-family home without the burdens of homeownership.
While each group has slightly different preferences, we’ve been able to meet all their needs over the years and value the trust they place in Invitation Homes as a leading company leasing single-family homes.
Fact #2: Invitation Homes offers a high-quality housing option to those who might not be able to afford buying certain homes in certain neighborhoods.
Our homes are in desirable neighborhoods, with good schools and access to transportation corridors that make it easy to commute to jobs. Our homes also have new fits and finishes, open and airy floor plans, and other high-quality, modern features.
Fact #3: We help residents improve their credit scores so their credit can be in great shape once they’re ready to buy a house.
We’re proud to share that about one quarter of our moveouts are residents leaving to purchase a home, a dream we’d like to think we helped them achieve by living in a great house with reasonable rent that allowed them to save, all while providing positive rent reporting so they could shore up their credit.
We report on-time rent payments for free through our partnership with Esusu. mid-2024, more than 176,700 of our residents are reporting rent payments with Esusu, and nearly 7,800 of them had established credit scores for the first time. Of the residents participating, 58% have improved their credit scores, with a 38-point average increase. Moreover, 8% of residents have moved their credit score from subprime to prime. Clearly, the opportunity to report rent payments can be incredibly meaningful for our residents. Whether their dream is to buy a home, fund an education for themselves or their family members, open a business, or something else, building a solid credit history is an important foundation.
People deserve transparency.
Fact #1: Invitation Homes prides itself on transparency for those looking to rent with us.
We clearly outline all fees and costs associated with renting on our website to ensure we’re transparent from the very beginning of any resident relationship. In addition, when a resident signs a lease with us, all fees are clearly listed on the first page of the lease, with a total monthly obligation tallied at the bottom of the page. We also include full, detailed monthly costs for each listing on our website, as well as on third-party platforms like Zillow, Realtor.com and other similar sites.
Fact #2: Invitation Homes regularly shares operating and financial data.
Invitation Homes has been a publicly traded company since 2017, and as such, we publicly report a variety of data about our operations and finances each quarter. Those reports can be found on our website. Being a publicly traded company also means we’re accountable to shareholders, including large pension funds that represent public sector workers and teachers.
For more information on our role in the single-family rental space, visit our blog.