Any current or prospective homeowner, real estate agent, or housing industry expert will tell you that a multitude of factors impact the price of a property. Location, supply and demand, age and condition of the home, and cost of goods and services are just a few of them. These elements influence prices throughout the housing ecosystem, including in the single-family rental home market. At Invitation Homes, we work hard to ensure that our prices are fair and in line with local market factors. But like broader economic activity, these factors are variable, which leads to regular adjustments in the prices we charge for both new leases and renewals. Understanding what impacts rental prices and how and why they change helps put into perspective Invitation Homes’ role when it comes to the price of single-family rental home properties.
When looking for a home, we understand that residents have a number of choices. That’s why we price our rents competitively in every market in which we operate. Our prices align with local factors and are often below broader industry trends. For example, our blended rent growth year-over-year at the end of the second quarter in 2022 was 11.8% — below the overall U.S. single-family rent growth increase of 13.4% and the home price increase of 18.0% , both for the same period. Blended rent includes new lease rates as well as renewal rates over a defined period and provides the most accurate view of rent growth across our business.
Changes in price are not limited to the single-family rental industry nor are they specific to the housing market at large. Other sectors of the economy continue to face record levels of demand and persistent inflation, which has resulted in higher prices for Americans across the board. As of January 2023 , groceries were up 11.3%, electricity 11.9%, and transportation services 14.6% year over year.
Like other sectors, our business operations have been impacted by the rising cost of goods and services, supply chain constraints, and other challenges that come with uncertain economic conditions. And while prices may adjust to address these factors, renting with Invitation Homes will continue to be an affordably priced option in today’s housing market. Recent estimates project that owning an entry-level single-family home would cost $3,058 a month while the median monthly rent on the same house would be around $2,170. Leasing a single-family home is an ideal option for many Americans who are transitioning between locations, aspire to homeownership, or simply prefer the ease that comes with renting.
Invitation Homes is prepared to continue to help meet strong demand in the housing market as the industry works to address challenges created by a long-term lack of supply in single-family homes. Each day we’re innovating to improve leasing by advancing the latest technology, cultivating growth among associates, and reducing our environmental footprint. As we do so, we ensure that our prices are set in accordance with each of our local markets, so we remain competitive and provide residents with the best experience possible. We may make up a small sliver of the overall housing market, but we’re an important choice for residents looking for high quality, flexible option.