Lower Rates, Rising Prices
We observe that prices are rising in the US and are predicited to increase a further 10% next year according to Zillow:
This is happening despite a recession, we believe that lower mortgage rates are the reason this is happening.
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.
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.
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