U.S. Single Family Rental REITs: Not Home Free Yet

Research evidence excerpt

U.S. Single Family Rental REITs: Not Home Free Yet

rate in the second half of the year. AMH has

only 35% of 2026 scheduled lease expirations in 2H. We expect the REITs to maintain a

relatively cautious tone with earnings. We expect demand to be relatively stable, but we

think it needs to trend up to absorb lingering BTR deliveries as well as offset elevated

supply from the accidental landlords.

We think there could be some modest pressure on SFR relative valuations when the REITs

report 2Q'26 results. SFRs are no longer the worst performing REIT subsector in 2026

with total returns YTD of +10.8% that trail the REIT industry by -880 bps. This compares

with 3 months ago when SFR YTD total returns were down -10.5% vs. the REIT industry

of up 4.8%. At this point, we think other REIT subsectors may screen as relatively more

attractive including Apartments which trade at a relative premium to REITs of 7% vs.

SFRs of 11%. Additionally, the SFR REITs both screen as net long crowded per UBS Quant

data with INVH being one of the most long-crowded REITs overall. We think this

positioning may leave limited room for upside in share prices following their earnings

release even if data are relatively favorable.

We reaffirm our Buy on INVH and our Neutral on AMH. We think INVH's valuation can

close the gap to AMH over time as its SSRev recovers. We update our price targets

following the recent upward moves in REIT industry multiples and maintain our applied

relative multiples for the subsector and the companies. Our AMH price target moves to

$35 (prior $32). Our INVH price target moves to $35 (prior $32).

Sequential accelerations in new lease rent spreads QTD through May have

been strong... Specifically, AMH new lease growth in 2Q compared with 1Q from