Residential REITs are more than just apartment building owners; they enable people to live or stay in all types of dwellings including houses, RVs, and boats. Residential REITs own more than 1.1 million apartment units and 183,000 single family rental houses as well as RV parks and marinas.
The ongoing housing crunch has helped REITs maintain strong operating performance through the past few years. As more adults choose to live alone, demand for housing continues to rise even without population growth. The latest earnings report shows residential REIT FFO was up slightly from the previous quarter and up 5.49% over the previous year in the first quarter of 2023.
Residential REITs are one of the few property sectors with positive returns in 2023. Year-to-date returns for May 31 are up 2.78% while the FTSE Nareit All Equity REITs index is down 2.27%. Increases in rent have continued to outpace the consumer price index (CPI) for all goods and services. The rent portion of CPI was up at an annual rate of 8.8% compared to 4.9% for all goods in services in April. With mortgage rates continuing to constrain housing purchases, many people are continuing to rent.
- 1%: Rent is up 2.1% year-over-year in April of 2023.
- 7%: The national rental apartment vacancy rate was 6.7% in 2022, continuing to decline from 2017.
- 38 million: There were 37.9 million one-person households in 2022, or 29% of all U.S. households. In 1960, single-person households represented only 13% of all households.
Below is a list of Nareit member companies from the residential sector.