Navigating the Single-Family Rental Market in 2025: Key Insights and Trends
CoreVest President Michael Peerson shared his insights on the current state of the Single-Family Rental (SFR) market during an engaging panel discussion at SFVegas 2025. The panel was held 2/23/25 and this commentary reflects his opinions at that time.
As we step into 2025, the Single-Family Rental (SFR) market is poised to face a mix of challenges and opportunities. From inflation and public policy to geopolitical issues, several macroeconomic factors are set to influence the landscape of SFRs.
Inflation and Rate Cuts: A Double-Edged Sword
Inflation and potential rate cuts are at the forefront of economic discussions. The Federal Reserve’s current stance suggests that significant rate cuts may not be on the horizon, keeping borrowing costs relatively high. This scenario could drive higher maintenance costs and living expenses, continuing to make SFRs an attractive alternative to homeownership.
Rent Growth: A Slower Yet Positive Trajectory
Although rent growth is anticipated to stabilize, it is still expected to remain positive, albeit at a slower rate than in past years. The rise in Single-Family Rental (SFR) supply is putting downward pressure on rent growth, but the ongoing demand for rental properties continues to sustain the market.
Market dynamics: A Strategic Focus on Underwriting
While prices could rise, it’s worth noting that current credit scores are generally healthier than they were before the Global Financial Crisis. Additionally, home prices are projected to rise at a moderate pace, which should support and potentially increase the demand for SFRs. These market dynamics highlight our strategic focus and importance we put on our disciplined underwriting guidelines.
Insurance: A Growing Focus
It is likely that insurance and insurance costs will remain in focus, especially in certain geographies that are prone to natural disasters. This adds another layer of cost and complexity for homeowners and investors alike. At CoreVest, we are being intentional with our investments in order to maintain geographic diversification.
The Robustness of the SFR Market
Despite these challenges, the SFR market remains robust. The ongoing demand for rental properties and the challenges associated with homeownership continue to drive the market forward. The value proposition of SFRs is only getting stronger, with factors like housing affordability and demographic changes playing a crucial role. Currently, the mortgage cost for a starter home is 44% higher than renting, and this gap is widening. Rising insurance and property taxes are making homeownership even more challenging, further increasing the demand for SFRs.
At CoreVest, we’re optimistic about the future of the industry. The changing dynamics represent opportunity for those that can adapt and grow, and we are ready for that. We would love to hear your thoughts on these trends.
Thank you to SFA for organizing another insightful and impactful conference. We are deeply grateful to our clients, partners, and colleagues for taking the time to meet with us and share their valuable insights.
CoreVest is a market leader in real estate investment financing needs and has helped thousands of investors finance over 166,000 units across the nation. We’d love to talk with you directly on how we can maximize the value of your investment projects or properties. Call us today at 844.223.7496 or email [email protected] to discuss how CoreVest can help you grow your business!
Disclaimer:
The views expressed herein are the opinions of CoreVest personnel. CoreVest makes no representation or warranty, express or implied, as to the accuracy or completeness of any of the information in this presentation. The views expressed may be based on market data or research provided by third-parties. CoreVest has not independently verified any of the information set forth in this presentation.
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Nothing contained in this presentation is, or should be relied upon as, a promise or representation as to the future performance of the real estate markets referred to herein. In all cases, readers should conduct their own independent investigation and analysis of the information contained in this presentation.