Goldman’s Conversation With Top Execs Reveals What’s Ahead For Single-Family Rentals

The Single-Family Rental (SFR) space has become the de facto middle-class housing market across America. With elevated 30-year mortgage rates and high home prices, affordability has collapsed, sidelining multiple generations of Americans from homeownership.

For expanded visibility into the SFR market, as well as homeownership affordability, demand fundamentals, supply dynamics, rental growth expectations, and the transaction environment, Goldman analysts hosted a private webinar on Tuesday with executives from several of the largest owners of single-family homes in the U.S, including David Todd (Managing Director in Brookfield’s Real Estate group as well as CEO of Maymont Homes, Brookfield’s SFR business), Chris Avallone (Amherst’s CFO & Head of Merchant Banking), and Dave Feldman (Co-President of Progress Residential). 

One of the key takeaways from the webinar is that the SFR market remains resilient, driven by high homeownership costs that continue to fuel strong rental demand, particularly in the Midwest and interior Southeast, while softer conditions persist in Florida, Texas, and Phoenix. 

The executives told Goldman that tenant credit quality and occupancy remain high, at nearly 96%, with average lease terms around three years. They said rent growth is moderating, as renewal spreads average 3% to 4% and new leases soften slightly, though smaller, more affordable homes are seeing renewed demand.

Here are the top takeaways from the webinar, which were presented in bullet-point format to clients by a team of analysts led by Julien Blouin:

Demand: Still Healthy but More Market Dispersion

• Demand: remains solid given elevated homeownership costs, which continues to benefit top and bottom of demand funnel for SFR.

• Regional performance: relative strength in the Midwest and interior Southeast markets; market softness exists in parts of Florida, Texas, and especially Phoenix.

• Quality of demand: SFR tenant credit and income profiles remain very strong, high quality applications, portfolio occupancy near 96%, with subdued levels of turnover.

• Wage growth is now outpacing home-price appreciation while mortgage rates should ease somewhat, modestly improving homeownership affordability — but not enough to materially convert renters to buyers.

• SFR continues to represent by far the most affordable way to access a home for families priced out of ownership.

Rent Trends & Leasing Dynamics: Softer New Leases But Renewals Holding up for now

• Our panelists characterized 1H25 as normal, but with signs of moderation in operating trends in 2H25 (to differing extents).

• Blends remain healthy mostly underpinned by renewals (~75% retention).

• New leases softer in recent months, slightly positive as of September.

• Renewal spreads: averaging 3–4%, consistent with low/mid-single-digit total revenue growth outlook for 2026.

• Length of stay: >3 years on average; tenants less price-sensitive due to frictional move costs. Infill vs. outer-ring: infill portfolios (mature neighborhoods) show greater resilience and lower rent volatility. Outer-rings proving more vulnerable to supply impacts.

• Smaller homes at lower rents rebounding the most in terms of demand, reversing prior preference for large 4–5BR homes.

• Stronger markets: Midwest, inland parts of Southeast.

• Weaker markets: Florida coast, Phoenix, Dallas.

Supply Environment: Managing Through BTR & Shadow Inventory

• Favorable demand–supply imbalance still exists, but incremental supply (BTR and shadow) is giving renters more choice, softening new-lease pricing.

• BTR pipeline: skepticism around execution and funding continuity; institutional capital flows choppier — more limited near-term threat.

• Builder tapes: some for-sale pivoting to rental, but selective participation due to absorption dynamics.

The full note is available in the usual place for ZeroHedge Pro Subs and includes additional commentary on the capital markets and transaction environment within the SFR space.