A house on Casaba Ave. at Canoga Park, which Invitation Homes recently bought, repaired, and converted into a rental property.
Mel Melcon | Los Angeles Times | Getty Images
An area of the property market booming due to the suburban revival triggered by the pandemic could also be a place investors can turn to amid recent fears of rising interest rates.
Single Family Home Rental REITs are publicly traded real estate companies focused on providing single family homes to Americans looking to rent a home versus home ownership.
The securities are benefiting from the de-urbanization trend and could also be a hedge against rising mortgage rates. When interest rates rise as they do now, the real estate market can often cool off as fewer buyers are funded. REITs will often find weakness in times of rising interest rates due to the impact on the property market and because higher returns make the group’s payouts less attractive.
However, this part of the market could benefit from this in this environment, as families flock to rental space for single-family homes due to the higher rates.