Rising Prices

We observe that prices are rising in the US and are predicited to increase a further 10% next year according to Zillow:

Source

Lower Rates

This is happening despite a recession, we believe that lower mortgage rates are the reason this is happening.

Source

Large Landlord Scaling-up

An interesting trend observed during the pandemic is that American Homes 4 Rent has switched its business model from buying homes below replacement cost to purpose-building entire subdivisions to their specifications for the rental market.

So the large entities that were created by the subprime mortgage and foreclosure crisis and compete against mom and pop landlords are not dissapearing, they evolve.

Differential Growth

We expect renters with below-median pay to have problems paying rent whereas above-median pay workers to use their access to credit to benefit from this trend.