Record occupancy rates are emboldening landlords with single-family homes to hike rents aggressively, testing the limits of booming demand for suburban rentals.
American Homes 4 Rent, which owns 54,000 houses, increased rents 11 percent on vacant properties in April, according to a statement Thursday. Invitation Homes, the largest landlord in the industry, boosted rents by a similar amount, an executive said on a recent conference call.
U.S. housing costs are jumping as vaccines fuel optimism about an economic 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.
In the early months of the pandemic, the big single-family rental companies slowed rent increases, preferring to maximize occupancy during the economic uncertainty. Now, low vacancy rates are giving them pricing power.
Invitation Homes reported an occupancy rate of more than 98 percent during the first quarter, freeing the company to raise prices by more than 10 percent on vacant houses in April. Invitation Homes is targeting increases of as much as 8 percent 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 their offices.
Source : Blomberg News
