At Hawkhill Homes, we believe Single-Family Rental (SFR) is a vital pillar of a healthy housing ecosystem. Despite the noise, institutional ownership represents less than 1% of total U.S. housing. Professional capital acts as a catalyst investing in communities and creating new supply where it's needed most.

As leaders gather for Davos earlier this month to address the housing affordability crisis, here is how the industry's top voices view the landscape:

1️⃣ Global Asset Managers: The Supply Shortage
Blackstone: "Institutions own only 0.5% of US homes. Higher prices are the result of a 4M+ unit supply shortage, not institutional activity."
Apollo Global Management, Inc.: Highlighting the "structural" nature of the deficit, noting the U.S. faces a shortfall of millions of homes through 2029.

2️⃣ Large SFR REITs: Professionalizing the Rental Choice
Invitation Homes: Focuses on the "lease lifestyle" as a flexible, high-quality alternative for families in a high-interest-rate environment.
Pretium: "Private capital is part of the solution... providing $3B+ in liquidity to builders to accelerate home construction."

3️⃣ Institutional Research: Identifying Bottlenecks
Goldman Sachs: Identifies zoning and land-use restrictions - not ownership structure as the primary constraints on affordability.

Zelman - A Walker & Dunlop Company & Associates: Data shows institutions have frequently been net sellers, debunking the myth of "buying up the block."

🔢 Industry Research: Building the Future
John Burns Research and Consulting: Reports that Build-to-Rent (BTR) now accounts for ~7% of all single-family starts, proving that institutional capital is directly adding new units to the market.

The Davos Policy Agenda: Potential Solutions - Beyond construction, leaders are discussing radical new levers to unlock the market:
🔑 New Financial Instruments: Evaluating 50-year mortgages and 50-year Treasuries to lower monthly payment burdens
🔑 Loan Flexibility: Expanding assumable and portable loans to help homeowners move without losing their low rates
🔑 Unlocking Land: Discussing the opening of federal land for residential development to lower the cost of entry
🔑 First-Time Support: Refocusing Fannie Mae & Freddie Mac specifically to boost liquidity for first-time homebuyers

The evolution of Single-Family Rental (SFR) from a niche trade to a core real estate "food group" has been a remarkable journey.

As the asset class matures, the conversation must shift.

At Hawkhill Homes, we believe the next chapter isn’t just about growing portfolios, it’s about addressing affordability head on and bridging the gap between renting and owning.

By focusing on the "On-Ramp," "Off-Ramp," and "Renter by Choice" profiles, creating a more resilient model that serves the resident as much as the investor is the future.

When incentives are aligned, the entire ecosystem wins.

We are committed to building a structure where doing the right thing is the highest-value strategy.

Progress requires self-reflection, and we’re excited to lead that conversation.

The Future of U.S. Housing: Challenges & Opportunities

At Hawkhill Homes, we believe housing is more than shelter it’s the foundation for families, communities, and long-term economic vitality.

Recent insights from Morgan Stanley Thoughts on the Market podcast highlight both the headwinds and opportunities shaping the future of U.S. housing.

🔹 Affordability Pressures: Despite multiple expected Fed rate cuts, mortgage rates remain elevated, keeping much of the market “frozen.” With over 60% of U.S. mortgages locked in below 4%, many homeowners are hesitant to sell - limiting supply.

🔹 Demographic Demand: Millennials and Gen Z are entering their prime homebuying years. By 2030, the U.S. will need an estimated 18 million new housing units to meet demand.

Whether through ownership or single-family rentals, this demand creates opportunity for thoughtful development and innovation.

🔹 Shifts in Behavior: Affordability challenges are fueling a rise in single-family rentals and driving migration from high-cost metros to more affordable regions. These shifts will reshape local economies, infrastructure, and long-term community planning.

🔹 Investment in the Future: From modular and sustainable housing solutions, to senior and affordable housing, to innovative financing models - there are multiple pathways to strengthen access and build intergenerational wealth through homeownership.

Forever Renters and the Rise of Flexible Housing Solutions

The definition of the “American Dream” is changing. Across generations from Gen Z professionals delaying first-time homeownership to “baby chasers” relocating closer to family, the profile of the forever renter is expanding.

Rising mortgage rates, limited inventory, and soaring ownership costs are pushing even high-income households to rethink housing. In fact, the number of U.S. renter households with net worth over $1M+ tripled between 2019 and 2023. Renting is no longer a stopgap - it’s a strategic choice for flexibility, liquidity, and lifestyle. To meet this shift, innovative solutions are accelerating with strong demand:

Co-ownership models like CoVista.co that spread costs and risks while offering equity upside. Home equity investment (HEI) solutions that unlock value without forcing a sale.

Sale-leaseback structures that provide liquidity while letting residents stay in place.

Even as some innovative high profile proptech models faltered in the face of rising rates, these approaches are gaining traction because they align with what households want most today: control, adaptability, and freedom from the old binary of “own vs. rent.” The housing industry is being reshaped by demographics and financial innovation - and the winners will be those who create flexible pathways for this new era of renters.

Why smart capital continues to back SFR:
• 70% of renters would prefer a single-family home over an apartment 🏡
• The U.S. is short 3.8M–5M homes — and that gap could last through 2040 ⏳
• Institutional ownership is still just 3–4% of the SFR market — room to grow 📈
• COVID pushed many mom-and-pop landlords out — shrinking supply despite demand ❌
• Renting is now cheaper than owning in many U.S. metros due to high interest rates 💸
• Millions of Americans rely on non-QM lending (self-employed, gig workers, etc.) 🧾

Don Mullen, CEO of Pretium Partners, recently joined Goldman Sachs to talk about the future of real estate investing — Pretium’s success is hard to ignore.

📈 Demand from population growth is one of the key drivers of housing. 2024 domestic migration trends: All top 20 U.S. metro areas gaining population are in the Sun Belt, from Dallas-Fort Worth (24,550 net migrants) to smaller cities like Lakeland, FL, and Myrtle Beach, SC.

❄️ No Snow Belt metros made the list, per U.S. Census Bureau data analyzed by Jay Parsons, Rental Housing Economist.

This reflects a decades-long shift from the Northeast and Midwest to the South and West, driven by affordability, quality of life, and economic opportunities.

The rise of remote work and post-pandemic preferences continue to fuel this trend, with smaller Sun Belt cities gaining traction alongside major hubs. ☀️

🏡 Q4 2024: Single-Family Rental (SFR) REITs Continue to Show Strength 🏡

The largest SFR REITs—AMH and Invitation Homes—closed 2024 on a high note, demonstrating resilience, strategic growth, and long-term fundamentals in the rental housing sector.

📈 Key Financial & Operational Highlights

✅ AMH reported $436.6M in revenue (up 6.8% YoY) and 3.6% same-home NOI growth. The company acquired 1,632 homes, expanding its footprint to over 60,000 homes.

✅ Invitation Homes generated $659M in revenue (up 5.6% YoY) and 4.7% same-store NOI growth. They acquired 501 homes in Q4, reaching a total of 85,221 homes under management.

🔍 CEO Insights
Bryan Smith, CEO of AMH:
"Our strong leasing momentum and disciplined growth strategy continue to position AMH as a leader in the industry, delivering stable returns for stakeholders."

Dallas Tanner, CEO of Invitation Homes:
"With Same-Store NOI growth of 4.6% and AFFO per share growth of 6.7%, we delivered one of the strongest performances among public residential REITs in 2024."

The 2025 Housing Market: What’s Next for Home Prices, Interest Rates, and Supply? J.P. Morgan

J.P. Morgan Research projects a 3% rise in home prices this year and are cautiously optimistic. With mortgage rates expected to settle at 6.7% by year-end, demand remains historically low, and supply constraints persist.

Key Takeaways:

🏡 Inventory is rising but still historically low – High mortgage rates are keeping existing homeowners locked in, preventing the market from normalizing.

💰 Institutional investors remain active – Despite affordability constraints for individual buyers, private equity and large-scale investors are still finding opportunities in the single-family and build-to-rent (BTR) sectors.

🏢 Real estate services demand is evolving – With fewer transactions, institutional owners and landlords are prioritizing asset maintenance, renovations, and strategic property management to maximize returns.

🌟 Amazing energy at Blueprint: The Future of Real Estate conference last week in Las Vegas and at the Information Management Network (IMN) SFR Operations / AI Forum in Austin last month - these events highlighted big, on-going innovation in the SFR sector and real estate technology. 🏙️💡

Through roundtable discussions at Blueprint: The Future of Real Estate and discussions with folks in the space:
💡 "Funding Real Estate Innovation" 💡 and
💡 "Resident Impact and Impact Investing - How it contributes to performance and success" 💡

Our team shared views from our collective experience over the past decade in SFR and proptech operations and investing. 💼🏘️

Our Key Takeaways:
📊 SFR Analytics Advancement: industry is leveraging sophisticated data analytics to enhance investment strategies and operational efficiencies. Data-driven approach is reshaping decision-making processes across the sector with market, asset, neighborhood selection driving faster and more accurate underwriting at scale.
💰 Institutional Investment Trends: notable increase in institutional demand for SFR properties and particularly portfolios in light of the recent Fed Fund rate cuts, indicating growing confidence in the sector's long-term prospects and stability. Recent auction of a large institutional portfolio saw significant interest from many bidders who have raised significant amounts of capital dedicated to SFR.
🤖 AI Integration: LLMs and gen AI are making substantial inroads in property management, leasing, maintenance, and customer support, driving significant productivity improvements and cost efficiencies potentially up to 15% with margin improvement in operating companies.
📈 Economic Climate 💪 Market Resilience: Fed Reserve's recent rate cuts, announced during the conference, have positively impacted market sentiment.
🏠 Housing Innovation: discussions centered on tech advancements in asset management, construction, property management, and tenant experience, signaling a shift towards more efficient and sustainable housing solutions. Interest in opco / propco structures becoming more common with different investor capital looking to amplify returns.

Industry Observations:
🌐 Ecosystem Expansion, Global Perspective: SFR sector continues to attract a diverse range of stakeholders, from investors and operators to technology providers and service companies globally.
💰Several large technology platforms have ample cash war chests and continue to innovate.
💻 Tech Adoption: early adopters of AI-enabled services and advanced data analytics are gaining competitive advantages in operational efficiency and investment returns.
📊 Performance Metrics: Increasing focus on innovative strategies to outperform traditional market returns with sale leaseback, co-ownership hybrid models.

As we move forward, it's clear that embracing technological advancements and adaptive strategies will be key to success in this evolving landscape. 🚀🏘️

🌟 Fed Loosening Cycle: Navigating the New Landscape in Real Estate 🌟

As the Fed begins its long-awaited interest rate cutting cycle, we're seeing a mixed but promising picture for real estate markets. While risks persist, especially in sectors like office real estate, falling rates are unlocking significant opportunities for those prepared to capitalize.

"Goldman Sachs Exchanges Falling rates: A salve for real estate?"
- Lotfi Karoui, Chief Strategist, Head of Credit, Mortgages and Structured Products Research
- Jeff Fine, Global Co-Head, Alternatives Capital Formation, Asset & Wealth Management
- Allison Nathan, Senior Strategist

📉 Relief from Rising Rates
The rate cuts provide much-needed relief for rate-sensitive sectors like housing and commercial real estate (CRE). Funding costs have come down sharply, with 10-year yields dropping from their 2023 peak of 5% to 3.75%, opening doors for more flexible financing and growth across various property types.

🏠 Housing Market Outlook
The U.S. housing market, which faced an unprecedented affordability crisis, is seeing some reprieve. Mortgage rates have dipped, improving affordability, though supply constraints remain a key factor in limiting broader improvements. A “lock-in” effect, where three-quarters of homeowners hold mortgages below 5%, is constraining the housing inventory, but this tightening is expected to support prices.

🏢 CRE Challenges and Opportunities
Commercial real estate, particularly the office sector, continues to struggle under secular changes, especially as remote work reshapes tenant demands. However, dispersion within the market creates a unique opportunity for active managers to distinguish between winners and losers. Sectors like retail and logistics are positioned to benefit from consumer strength and supply chain resilience.

⚠️ Risks Remain
While the broader economy is on a solid path toward a soft landing, challenges in the office sector and concerns over the “maturity wall” of CRE loans coming due remain critical issues to watch. Despite these, falling rates and a healthier banking system are providing a stable foundation for continued investment and capital flow.

💡 The Path Ahead
For investors, this is a moment of opportunity. Attractive assets are becoming available due to dislocation, and creative lending opportunities are emerging where traditional banks are stepping back. As the market continues to evolve, real estate remains a space of both caution and potential.

#DovishFed #HousingMarket #SFR

Recent data from Zonda's "Baby Chaser Index" reveals significant demographic trends impacting housing markets, with notable effects in Texas and Oklahoma. 🏘️

This shift, driven by intergenerational migration patterns, is reshaping real estate dynamics in key metropolitan areas. 🔍

Key Findings:

25% of baby boomers plan to retire near their adult children and grandchildren, a trend termed "Baby Chasing." 👵👴➡️👨‍👩‍👧‍👦

🤠 Texas markets dominate the index: 🌟
Austin: Ranked #1 for 4 out of 5 years 🥇
Dallas: Secured the #4 position 🏙️
Houston: Placed in the top 10 🛢️

Oklahoma City: Emerging as a significant player, ranking #9 and consistently in the top 10 since 2020. 🚀

Market Highlights:
Austin: Continues to attract millennials despite challenges in the tech sector, with boomers following suit. 💻🌵

Dallas: Leading in master-planned communities, offering a balance of urban amenities and suburban space that appeals across generations. 🏙️🏡
#babychasers #demographicshifts

🌴 🏘 Despite recent headlines, increasing optimism within SFR and tech innovation was contagious in Miami this week at IMN. Top themes including: the readiness to deploy committed capital; address housing issues related to affordability.

🐂 🏘Now over a decade, IMN held its east coast SFR conference in Miami. The ecosystem of investors, operators and lenders continues to grow with increasingly optimism for the future. Information Management Network (IMN) 🌴 🏘

👨‍🚀 🌕 Major Themes Hawkhill Homes 💡🚀

🤖 AI SFR Advancements: seeing through the hype, there is extremely high value in next gen vertical SFR platforms ready to capitalize on real world AI applications in acquisition-enabled sourcing, valuation, transaction pilots, data-driven decision-making in portfolio management, and customer success. 🤖This will enable next gen SFR platforms to outperform legacy SFR and tech platforms dealing with distracted priorities related to cost synergy and rationalization efforts and on-going sales processes.

🏡 Housing Innovation: co-ownership + fractional ownership, and co-living models addressing major issues in housing affordability, offering flexible solutions for renters, owners, and investors alike continue to raise capital and thrive.

🦅 🌄New living models addressing major problems facing SFR and housing: 1) Wealth Building and 2) Path to Ownership 🦅 🌄 Hawkhill Homes🏔 CoVista.co 🏔 (🌟 "coming soon" 🌟 )