Single-family rental REITs have fallen well behind the wider REIT market so far in 2026, underperforming the broader REIT index by 1,540 basis points and making the subsector the second-weakest performer year-to-date, according to BTIG.
BTIG notes the sector's relative valuation has declined from 1.19x at the start of the year to 1.07x, a drop that places it at the lowest level since BTIG began tracking the metric and below the historical average of 1.38x. Consensus FFO growth expectations for the sector also lag peers, with projected growth for 2026 trailing by 320 basis points and 2027 by 290 basis points.
Regulatory developments related to the 21st Century ROAD to Housing Act have contributed to investor caution in the space. BTIG characterizes the immediate concern as most acute for new transactions, while noting that long-term Federal-level regulatory risk appears limited in its view. The firm also highlights that single-family rental operators have been relatively modest net investors in recent years and, in the scattered home market, have been net sellers.
Housing market dynamics are another headwind identified by BTIG. Market-specific supply pressures have, in many areas, eroded pricing power and slowed internal growth for single-family landlords. With peak leasing season approaching, BTIG says it will monitor rental trends closely, along with capital allocation choices such as share repurchase activity, the sector's seasonality patterns, and ongoing regulatory commentary when companies report earnings.
On specific coverage, BTIG is retaining a Buy rating on American Homes 4 Rent (NYSE:AMH) with a $40 price target. The firm is also updating its estimates for both AMH and Invitation Homes (NYSE:INVH).
Given these dynamics, BTIG's near-term focus for single-family rental REITs will center on leasing momentum, balance between buying and selling activity in scattered home portfolios, and any fresh regulatory guidance tied to federal proposals. These elements will be key to assessing whether the sector's valuation and expected FFO growth can recover from current levels.