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And, as the firm separately noted, 43% of real estate agents think private pocket listings have become more common. Such purchases are a tool used by institutional investors interested in blocks of houses.","The <a href=\"https://www.globest.com/2022/06/30/lawmakers-target-corporate-landlords-for-predatory-sfr-investment/\">trends had also resulted in lawmakers targeting institutional owners</a> of SFRs for \"predatory\" investment.","According to a new report from Moody's Analytics, such pressure might resume, but the dynamics are getting complex. While saying the SFR REIT market is \"maturing but still relatively untested,\" the firm provides data of some significant growth. Institutional owners make up 3% of the total single-family rental market in the U.S., but that share is growing fast and also varies widely by metro area.","<div class=\"paywall-content\">That total can be misleading because only a small fraction of the total homes is for sale at any given time. Even a large percentage of those purchases move the total ownership needle slowly.","And yet, the changes are noticeable. According to Moody's, in the five years between 2017 and 2022, the number of properties that SFR REITs held expanded by 8.4% even as the single-family detached housing stock grew by only 2.9%.","With all the increases, the institutional SFR industry have also been dealing with market conditions that aren't always favorable to them.","\"In 2020, their holdings decreased every quarter from the corresponding quarter in 2019,\" the report stated. \"However, the slowing pace and disposition of assets must be understood in the wider context of long-term investment goals: properties with low cap rates were sold to repay debt and to fund future acquisitions, either via direct development or the purchase of homes from joint venture developer partners.\"","Another aspect of current dynamics is average occupancy rates above 95%, with variations as \"operators may strategically give up occupancy in some markets to achieve a higher rental rate per unit.\"","Rents had year-over-year blended growth in 2022 between 8% and 10%. That shouldn't be surprising given rental growth in multifamily and also the role that shelter played in driving inflation upward.","Renewal rates are strong, but new lease rates are slowing, which raises the question of whether people are moving away from switching to SFRs as an alternative to purchasing a house.","One question that Moody's explicitly asked was, \"How does growth in the number of properties owned by this ownership structure impact supply dynamics and the decision calculus undertaken by developers?\"","One consideration will likely be what institutional investors can afford to make properties profitable. Median <a href=\"https://www.globest.com/2022/10/21/inside-srfs-boom-times/\">prices that institutional investors pay are about 26% lower than the median prices</a> in the same states, according to a National Association of Realtors study. About 42% of respondents said that \"institutional investors were purchasing homes that needed repair.\"","In that sense, the dynamic seems similar to house flipping, where flippers typically look for house prices that are 25% to 35% below market to leave room after repair and remodeling for a profit. But eventually those lower-priced properties will run thin.</div>"],"slides":[],"video":null},"articlePackages":null,"youmightlike":null,"readnext":{"contents":[{"uri":"/2025/07/10/florida-ends-tax-on-commercial-rent-bringing-relief-to-tenants/","title":"Florida Ends Tax on Commercial Rent, Bringing Relief to Tenants","byline":"Anthony Russo","summary":"The removal of the tax will increase the state's competitive advantage and lure more folks to Florida. 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