The single-family rental (SFR) and mortgage markets are undergoing significant changes and, to stay ahead of the curve, we recently attended two of the top conferences for these respective landscapes: IMN's 2024 Single Family Rental East Conference and MBA's 2024 Secondary & Capital Markets Conference. We summarize our key observations and takeaways that will directly impact lenders and investors and offer valuable perspectives on navigating the evolving landscapes.
Key Takeaways from IMN's 2024 Single Family Rental East Conference
Last week, we attended IMN's 2024 Single Family Rental East Conference, which provided us with a valuable opportunity to connect with others in the single-family rental space, understand the sentiment of the current investment landscape, and gain on-the-ground insights into what’s really happening in the market. Here are some key takeaways gleaned from our 1:1 discussions:
- Non-QM financing on the rise: There’s a growing popularity of Non-QM loans, particularly for DSCR financing and bridge loans. Attendees discussed how this trend is impacting their investment strategies, allowing them to access financing for a wider range of SFR opportunities.
- Softening rental market concerns: Many investors expressed concern about the softening rental market and are actively seeking strategies to mitigate the impact on cash flow generation from their SFR portfolios.
- Built-to-rent boom and its impact: The significant pipeline and inventory of built-to-rent units represents a key driver for SFR fund deployment, offering additional investment options in the current market.
- SFR funds shift focus: Attendees confirmed a shift in strategy by SFR funds, with a move away from scattered-site SFR acquisitions due to challenges in achieving desired yields.
- Flipping activity levels out: Discussions also confirmed a stabilization in flipping activity, with some suggesting a decline, which could be a sign of a maturing SFR market and/or challenges for short-term investment strategies.
- Coastal insurance concerns: Rising insurance costs in coastal areas seem to also be a major concern for investors and underscore the need to adjust investment strategies in impacted regions to account for additional expenses.
These insights offer valuable perspectives as we continue to innovate our current solutions and evolve our AI offerings to best support SFR investors as they navigate the changing SFR landscape. Some of the top challenges we were approached with included:
- Market selection - Where should I and shouldn’t I be deploying capital?
- Scalable acquisition - How can I identify and underwrite properties faster and more efficiently?
- Revenue management - How can I increase my margins and optimize rent pricing?
- Risk management - How can I identify and manage risk early?
Our residential property data and analytics solutions strive to accurately and instantly value every home in the U.S. In fact, we power 8 of the top 10 institutional SFR investors, partnering with them to acquire, underwrite, and monitor their properties. We’d love to begin a strategic dialog around how we can support you in your growth. Learn more about our solutions for SFR Investors or get started for free today.
Key Takeaways from Mortgage Bankers Association's 2024 Secondary & Capital Markets Conference
The Mortgage Bankers Association's 2024 Secondary and Capital Markets Conference brought together industry leaders in New York City for a timely discussion on the state of the mortgage market. While loan volumes and home sales are currently low, there was an undercurrent of optimism throughout the event. Many attendees believe that interest rate cuts in the latter half of 2024 will reignite the market.
Here are some of the key takeaways from the conference:
- The rise of the non-QM market: The Non-QM market is experiencing significant growth as it caters to borrowers who fall outside the parameters of traditional mortgage qualifications. This trend is expected to continue.
- Unlocking home equity: With over $30 trillion in home equity available, there's a substantial opportunity for second mortgage lenders.
Several general themes emerged during the conference:
- Affordability: Industry leaders are committed to creating solutions that address affordability challenges, particularly for underserved communities and first-time homebuyers. This may involve reducing fees, establishing special programs, and offering educational resources.
- Partnership: Lenders and investors are exploring collaborative strategies to streamline the borrower experience and reduce costs. The goal is to achieve "day one certainty" for borrowers.
- Technology and AI: Data and technology are transforming the mortgage industry by creating new opportunities for borrowers, lowering costs, and fostering greater transparency. Artificial intelligence, while still in its early stages, is poised to have a significant impact.
The conference provided a valuable platform for HouseCanary to connect with industry leaders. Through these conversations, a key theme emerged: attendees are eager to leverage technology to address valuation challenges in the Secondary Market. HouseCanary’s AI-powered real estate data and analytics solutions help accelerate their processes from pre-bid due diligence through portfolio management and disposition by:
- Optimizing costs and analysts' time
- Streamlining valuation and mark-to-market processes
- Maximizing returns with real-time monitoring
We look forward to MBA Annual in October and next year's Secondary and Capital Markets Conference.
Learn more about our real estate data solutions and automated valuation models (AVMs) for SFR investors and capital markets.
