The Next One 🧪

In today’s edition:

• An education on BTR
• Inventory sees a major uptick
• Rent-setting algorithms go to Capitol Hill

🎯 What’s Stirring

Each month, the headlines would lead you to believe that the next data release is the one that will really impact the economy and allow the Fed to make a move. The next jobs report, inflation number, tariff announcement, price index - the next one will show the dip or the spike or the reason to believe that the uncertainty everyone references is now… certain.

But so far this year the only dip we have seen is the market’s response to so-called Liberation Day, the only spike we have seen is in WNBA ratings, and other than that the line graphs aren’t all that exciting. Does this speak to the resiliency of the market? Or will the next tariff deadline of July 9 be the true disruptor?

• The Federal Reserve held rates steady in their June meeting, as expected by economists. This meeting occurred against the backdrop of inflation data that continues to hold steady - 12-month Core CPI came in at 2.8% compared to an expected 2.9%, and the 12-month Shelter index dipped below 4% for the first time since November 2021. Unemployment numbers also remain steady, with the latest report showing 4.2% unemployment, and remaining inside the 4-4.2% range since May 2024. The Fed is still forecasting two rate cuts this year, but there remains a threat of higher inflation.

• A surge of roughly 100,000 BTR properties are currently underway across the U.S., following a record-setting 39,000 new rental home completions in 2024. This represents an increase of over 15% from the previous year, with most of the growth occurring in southwest markets like Phoenix and Dallas. Industry data show that annualized BTR housing starts remained steady through Q1 2025 at about 84,000 units, with BTR comprising 8.4% of all single-family builds—up slightly from the prior quarter. Despite elevated interest rates, BTR construction starts have outpaced broader single-family activity, suggesting resilience compared to for-sale homebuilding. Interestingly, US Homebuilder sentiment has dropped to a 2.5 year low, according to the NAHB’s most recent report. The contrast between builder pessimism and BTR momentum highlights a strategic move toward rentals amid homebuyer hesitation. (For some great BTR numbers and metrics, click here)

• Inventory for Existing Homes increased over 20% compared to last year, climbing to 1.45 million in April. The housing market has not seen this much inventory since September 2020. New home inventory is also up compared to last year, increasing 8.6%. And the Pending Home Sales Index dropped 6.3% MoM. This data suggests the housing market is shifting towards the buyer, but high mortgage rates and affordability challenges continue to dampen activity. After a strong 5.3% increase in home prices in 2024, experts surveyed by Fannie Mae forecast more subdued growth at 2.9% in 2025 and 2.8% in 2026.
• Efforts to ban algorithmic rent-setting tools, like those provided by RealPage, are heating up across the U.S. While Colorado lawmakers passed a first-of-its-kind bill to prohibit these pricing systems, Governor Jared Polis vetoed the measure, citing concerns over limiting useful market technologies. Meanwhile, Jersey City became the first municipality in New Jersey to outlaw the use of rent algorithms, empowering tenants to report and sue violators. On the federal level, a provision in the House Republican tax bill would block state and local governments from regulating AI tools for 10 years – a move critics say protects rent-collusion software from oversight. Legal challenges remain ongoing, with the DOJ and multiple cities pursuing antitrust lawsuits against RealPage that could expose the firm and landlords to billions in damages. The outcome of this battle could shape the future of rental pricing – and whether algorithmic tools are seen as innovation or collusion.
• A new financing model provides a $100 million flexible fund to help nonprofits acquire investor-owned homes for affordability-focused use. The Community Foundation for Greater Atlanta (CFGA) is piloting this model, which gives nonprofits a “first look” at homes in low- to moderate-income neighborhoods and supports acquisitions through loans, gap financing, and equity investments. Earlier this year, nonprofits Brick By Brick and the Housing Partnership Network employed a similar approach – purchasing 345 homes from Pretium with a median price of around $285,000 – to preserve them as affordable housing. Following those acquisitions, some homes remain rentals under affordability covenants, while others are being sold to income-qualified buyers at roughly 70% of median resale prices. These transactions share a common blueprint: repurposing homes bought by private equity back into mission-driven portfolios.

📰 SFR In The News

Everyone knows this stuff and you should too.

• Todd Ortscheid explains SMART vs. BHAG goal-setting for property managers
• Rentvine acquires Bynnd and unveils product roadmap
• Vinebrook and Evergreen Residential announce strategic partnership
• Roofstock launches short-term rental management division
• Wolfson BTR breaks ground on new community in Tampa, Florida
• Invitation Homes announces new Developer Lending Program
  
  
  

The Beaker is a bi-weekly briefing from PlanOmatic on the economy, housing, and the forces shaping both. Have something we should cover? Reply to this email.

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