New JBREC/NRHC Single-Family Rental Market Index: Healthy Industry with Strong Leasing Demand and High Occupancy
John Burns Real Estate Consulting (JBREC) and The National Rental Home Council (NRHC) released the inaugural Single-Family Rental Market Index (SFRMI), a first-of-its-kind resource that will serve as the definitive gauge of professionally managed single-family rental industry conditions.
With scores above 50 indicating growth, the 3Q19 SFRMI at 65.8 confirms that the state of the single-family rental industry remains strong. The survey of professional operators who manage 122,275 rental homes in 48 metropolitan areas revealed stable occupancy year over year at already strong rates as well as high current and expected leasing demand. On a scale of 1 to 100, the index and sub-indices are:
- Single-Family Rental Market Index (SFRMI): 65.8
- Current Leasing Activity (3Q19): 72.8
- Expected Leasing Activity (in the next 6 months): 69.9
- Occupancy (3Q19) Compared to 1 Year Ago: 50.4
Key takeaways from the SFRMI’s third-quarter report include:
- An expanding market: A SFRMI of 65.8 (below/above 50 = contracting/expanding) indicates an optimistic view of current and future single-family rental industry market conditions.
- Current leasing activity slightly stronger than expected leasing activity for the next six months. The industry is slightly more positive on current leasing activity (73 index reading) than on expected leasing activity for the next six months (70 index reading). Seasonality is likely playing a role, as leasing activity generally slows during 4Q through early 1Q.
- Occupancy for same store portfolios remains unchanged from one year ago. Most large-scale operators continue to report stabilized occupancy rates at ~96%, a high occupancy rate.
The survey for the 3Q19 index was conducted from November 8, 2019, to November 14, 2019. A complete copy of the report is available to NRHC members, JBREC clients, and survey participants.
“We are pleased to partner with the NRHC to release the 3Q19 SFRMI, an essential barometer for the industry,” added John Burns, Chief Executive Officer of John Burns Real Estate Consulting. “This understanding of the health of the single-family rental industry will help us paint an even clearer picture of housing market conditions for all of our clients.”
“Our goal at NRHC is to be a leading source of information for the entire single-family rental industry,” said NRHC Executive Director David Howard. “We’re thrilled to partner with John Burns and his team on this index, which will be a valuable resource for SFR investors, owner-operators and service providers, as well as anyone else interested in gaining a greater understanding of this crucial housing segment.”
To reflect the latest perspectives from within the industry on the state of the SFR market, we will release the SFRMI quarterly going forward. If you would like to participate in future surveys, please contact Devyn Bachman at firstname.lastname@example.org.
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The Single-Family Rental Market Index (SFRMI) is a diffusion index comparing weighted responses of operators on three key aspects of their business (below/above 50 = contracting/expanding):
- Current leasing activity
- Expected leasing activity in the next six months
- Occupancy of their same-store portfolio1 compared to one year ago
The SFRMI survey asks operators to rate current leasing activity and expected leasing activity in the next six months as either Very Strong, Strong, Normal/Average, Weak, or Very Weak. Operators also rate the occupancy of their same-store portfolio compared to one year ago as Higher, the Same, or Lower.
1Same-store store portfolio includes only homes that have undergone initial rehab or were stabilized (i.e. initial rehab completed) 90 days prior to the beginning of the corresponding period in the prior year; excludes properties held for sale.
About The National Home Council
The National Rental Home Council (NRHC) is the trade association dedicated to advocating on behalf of the 16 million home single-family rental industry and its residents. The NRHC supports efforts to strengthen neighborhoods by filling an important need in today’s growing rental housing market.
About John Burns Real Estate Consulting
John Burns Real Estate Consulting (JBREC) is an independent research provider and consulting firm focused on the housing industry. John Burns founded the company in 2001 because he saw a need for better analysis on the housing market. The company has grown to a highly passionate team of research analysts and consultants in offices across the country, who work together to provide the most trusted source of US housing analysis. John Burns Real Estate Consulting’s research subscribers receive the most accurate analysis possible to inform their macro investment decisions, and the company’s consulting clients receive specific property and portfolio investment advice designed to maximize profits.
If you have any questions about the Single-Family Rental Market Index, please contact Jody Kahn, Senior Vice President at email@example.com.
If you have any questions about the Single-Family Rental Market Index, please contact Devyn Bachman, Research Manager at firstname.lastname@example.org.