The CEO of Invitation Homes, the nation’s largest owner of single-family rental homes, said he believes the recently passed housing bill prohibiting investors like him from buying existing homes will eventually drive down home prices, but not anytime soon. “I think in the medium to long term, that’s definitely how it will be,” Invitation Homes CEO Dallas Tanner said. “I think 90% of the bill is focused on deregulation. How do we simplify the entry of capital into housing? Are there ways to stimulate the supply-side challenges that we have? I think overnight, in the immediate term, it’s a little more complicated because there’s more to the story than just what the bill addresses.” Tanner pointed to the volatility of mortgage rates, high construction costs, and regulatory and zoning imbalances. In early January, President Donald Trump called for a ban on large-scale investors from purchasing single-family homes. homes to rent. He posted on social media that “people live in homes, not corporations.” This was part of a larger effort to address the housing affordability crisis. Some argued that institutional investors were driving owner-occupiers out of the market and inflating home prices. The ban became law in July, preventing investors who own more than 350 homes from purchasing more existing units. However, they can purchase new single-family homes built specifically for rental. That’s where Invitation Homes is leaning. “Our focus as an industry and as a company has been: How do we create new supply and incorporate it into the current housing system? We have built or acquired, in our partnerships with builders, more than 6,000 new homes in the last five years,” Tanner said. In January, just weeks after Trump’s post, Invitation Homes purchased a home builder, ResiBuilt. He has also purchased homes from large public builders such as Pulte Homes and Lennar to use as rentals. “We found through trial and error … that this new product, this beta product, the product that we do between these master-planned developments, works very, very well for our families. And so we were indexing that, and that’s part of our growth strategy,” Tanner said, adding that the company has been selling hundreds of its older rental properties. here to access today. The largest investors, those who own more than 1,000 homes, represent less than 3% of the single-family home rental market, according to various sources. However, they have a huge footprint in certain metropolitan markets, such as Atlanta (accounting for 25% of single-family homes there), Jacksonville (21%) and Charlotte (18%), according to the Urban Institute. Invitation Homes reported better-than-expected earnings in late July, even though rents and demand are not as healthy as they were in the early years of the pandemic. “We’ve seen sort of a reset of fundamentals. We talked about it on our last earnings call. We’re starting to see some pretty positive green shoots in several of our markets,” Tanner said. “But we’re really focused on how to navigate this and what it means.” Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.
