Raymond James has moved to a more bullish stance on two of the largest single-family rental real estate investment trusts, upgrading American Homes 4 Rent and Invitation Homes to Outperform following changes to proposed federal housing legislation and signs of improving operational trends.
The brokerage assigned a $35 target price to American Homes 4 Rent and a $32 target price to Invitation Homes after revisions to the proposed "21st Century ROAD to Housing Act" removed certain provisions that had been perceived as detrimental to institutional operators of single-family rental properties.
Among the legislative changes cited by Raymond James is the elimination of a previously controversial requirement that would have compelled institutional landlords to sell newly acquired built-for-rent homes after seven years, irrespective of whether those homes were occupied by tenants. The updated bill also preserves the ability of large investors to buy rental inventory from homebuilders and from other investors, maintaining pathways for consolidation and portfolio expansion within the sector.
Analysts at the firm said these revisions could materially reduce the regulatory uncertainty that had weighed on the industry. Raymond James noted that bipartisan support for the revised bill appears to be growing, and that a House vote is expected soon.
Policy shifts were not the sole driver of the brokerage's assessment. Raymond James highlighted improving demand dynamics for single-family rentals as elevated mortgage rates continue to place homeownership out of reach for many households. The report pointed to an uptick in leasing momentum during the latter half of the first quarter of 2026 that accelerated further in April, with both American Homes 4 Rent and Invitation Homes reporting rising occupancy and positive new lease growth.
The firm also estimated a sizable monthly cost gap between renting and owning entry-level single-family homes in the U.S., stating that renting currently costs roughly $1,000 less per month than buying. That gap, Raymond James argued, reinforces demand for rental housing in the current rate environment.
In addition to operational improvements and favorable affordability dynamics, Raymond James drew attention to aggressive share repurchase activity at the two REITs. Since late 2025, the companies have collectively repurchased more than $850 million of stock, a move the analysts said was executed while public market prices remained at steep discounts to net asset value.
On the supply side, the report indicated that built-for-rent housing starts have eased significantly, declining 33% from peak levels. Raymond James said that trend suggests excess new supply may moderate through 2026, which could alleviate one source of industry pressure.
Overall, the brokerage concluded that both REITs are well positioned to benefit from persistent housing affordability challenges, with institutional single-family rentals increasingly serving as an alternative for families unable to purchase homes in a high-rate environment.
Analyst actions - Raymond James upgraded both companies to Outperform and set respective target prices: $35 for American Homes 4 Rent and $32 for Invitation Homes.