With the national average 30-year fixed mortgage rate hovering around 6.43%, many homebuyers can no longer afford a down payment and the interest rate that comes with buying a home. . Unfortunately, due to the scorching heat of the real estate market, the average home price in the United States is around $356,054, which sent rents up 12.3% at the end of August.
With a typical rent of $2,090 per month, REITs in the apartment and single-family rental home market will continue to have an inflation advantage.
These three apartment and single-family home rental REITs could prove to be cash generators over the next few years as the housing market experiences a shortage of supply.
Communities AvalonBay Inc. AVB offers a dividend yield of 3.46% or $6.36 per share per year, through quarterly payments, with an inconsistent history of increasing its dividends. AvalonBay Communities is focused on owning large, high-quality properties in major metropolitan areas including the Pacific Northwest, New England and New York. The company has a portfolio of 299 apartment communities with more than 89,037 units in 12 states and is developing 19 additional properties, starting in 2022.
AvalonBay has experienced annualized dividend growth of 5% since its IPO and is the twelfth largest publicly traded REIT.
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Essex Property Trust Inc. HSE offers a dividend yield of 3.65% or $8.80 per share per year, using quarterly payments, with an aristocratic history of increasing its dividends for 27 consecutive years. Essex Property Trust is focused on owning large, high quality West Coast properties in the urban and suburban submarkets with a total portfolio of 253 apartment communities with over 62,000 units and is developing three additional properties with 571 units , from 2022.
In the second quarter of 2022, Essex Property repurchased 218,960 common shares for a total of $60.8 million, including commissions, at an average price of $277.81 per share. As of June 30, 2022, the company had $153.6 million of purchasing power remaining under the share buyback plan.
Invitation Houses Inc. INVH offers a dividend yield of 2.59% or 88 cents per share per year, making quarterly payments, with a decent track record of increasing its dividends for four years. The Invitation Homes portfolio is spread across 16 target markets characterized by strong growth in employment and household formation, with nearly 70% of the portfolio in the western United States and Florida.
Invitation Homes has a portfolio of over 82,000 single-family rental homes and counts as of 2022, and is focused on owning homes in the starter and climber segments of the housing market with an average sale price of approximately $300,000 and usually less than 1,800 square feet. feet.
Invitation Homes’ total revenue increased 13.4% to $557 million year-over-year, while property operating and maintenance costs increased 8.7% to reached $191 million, and diluted net earnings per common share increased 71.2% to $0.18.