EP#102 Dallas Tanner | Fall 2026 SFR & BTR Update: Are Weak Home Sales Driving Up Rents?

Jay Parsons (0:02)

Welcome, welcome. It's episode number 102 of The Rent Roll, your podcast on all things, rental housing, apartments, SFR, and BTR. Coming to you this week from New York City. And I'll tell you what, if you've been living under a rock, I've got some big news for you. Mortgage rates are over 7%, the discount to rent versus buy is near all time highs, and home buying remains soft. So, does all that mean that it's the absolute best of times for single family rentals and build to rent? And all those markets like Atlanta that we know are so favored by institutional investors, they just leading the way in SFR rent growth, like all the conspiracy theorists told us they would? Well, the short answer to both of these questions is no. It's not the best of times for SFR and BTR. It's been pretty soft. But at the same time, the great news for rental housing investors is, you know, rental housing of most types, it has a pretty high floor as well. It's still a pretty solid market. Just maybe not as strong as some people might have expected to be. At the same time, I do think it's starting to firm up a little bit. We're talking about all that today. The latest happenings in SFR and BTR, leasing, rents, construction, what we might expect for 2027 as everybody starts to look ahead and think about budgeting and planning for next year. And then we have the honor of being joined today by the CEO of the nation's largest SFR operator, Dallas Tanner from Invitation Homes. We'll talk about how his year was turned absolutely upside down with a presidential tweet back in January. We'll get his take on what the Road to Housing Act means for Invitation Homes and his peers. Could it lead to more consolidation in the SFR industry? I'm going to ask Dallas a tough question directly. I'm going to ask him, did the industry screw up on PR? And did that contribute to some of these challenges that they're now facing? We'll get his take on that question. And then we'll talk about the state of the market for leasing and rents as well. So let's get into it. And first and foremost, a big shout out to our headline sponsor, to JPI, a leading apartment developer, the state of purpose to transform, building, enhance communities and improve lives. Check them out at jpi.com. JPI is the cutting edge of some major innovations in apartment development and construction.

Okay, so as always, kick it off with the section we call, Here's a Chart. And today we've got an update on the state of BTR and SFR markets. Lots of data. We're going to go through it quickly and tee up our conversation with Dallas later. This segment is sponsored by Northspire. If you developed anything, you know this one. The forecast and the budget live in one spreadsheet, the draw package lives in another, and somebody in your team spends the last week or every month stitching them together into a report that's already stale by the time it goes out. Northspire was built by a real estate developer to end that. One platform for budgets, forecasting, draws, scheduling, and vendors across every project you've got. Northspire has facilitated more than $500 billion of projects. So check them out at northspire.com.

All right. So let's start with a chart that, you know, I bet everybody's got this one in your pitch decks, or at least some version of it.

It is the rent vs. own comparison. This data comes from my friends at John Burns Research and Consulting. They calculate the all-in monthly cost of owning a house for a new home buyer specifically, such with the mortgage payments, property taxes, insurance, and a lot of other things. And they compare that to renting. That discount to rent now measures, I'm sure you're ready for this, $1,006 a month for an average single-family rental. So more than $1,000 cheaper to rent a house versus buy one. And for BTR, it's even higher. It's $1,460 a month. And both of these numbers, if you could see the chart on my screen, both of those numbers are down a little bit from the peak of earlier in this cycle, but they're still way, way above the historical norms. I mean, for contacts from 2008 to 2022, the rent versus buy comparison for SFR was pretty comparable. It's always cheaper to rent an apartment, but for a house versus, a buying house versus a renting house, it was pretty comparable within about $200 or so, at least nationally, to rent versus buy in that time period from, again, 2008, 2022 Now, prior to that, the last time we had a material discount to rent SFR over buying a house was back in 2007, and it peaked at $600 in that period of time. So we're way above that right now. And what's really interesting, too, is that it's not just a high-cost coastal metro story anymore, not just California and New York. The discount to rent versus buy SFR, discount to rent SFR versus buy a house, I should say, it's not only above national averages in those spots, but I've mentioned this before, but the discount exceeds the national average, even in places like Dallas and Raleigh, Phoenix, Austin, Orlando, Boise, Las Vegas. So, and Salt Lake City as well, a bunch of others. So, the only places where renting is more comparable to owning in terms of costs, is generally now in the Midwest region, as well as in New Orleans and Memphis.