Unlocking Alternatives: Investing Beyond the Major CRE Asset Type

SFR / BTR: DEMAND DRIVERS Homeownership affordability challenges remain, driving buyers to rental options

• Rising home prices have become a key catalyst for the increased demand for single family rentals. Skyrocketing property values have made homeownership less accessible to many Americans, especially first-time buyers. As a result, individuals and families are turning to renting single-family homes as a more affordable and flexible housing option. • These Build-to-Rent (BTR) single family homes generally offer larger floorplates, outside yard access, better school districts and larger garage space. • Concurrently, slow household earnings growth has contributed to the single-family rental market's appeal. Stagnant wage growth, when compared to the rising cost of living and housing expenses, has left many individuals and families with limited disposable income for down payments.

Home Prices vs Household Earnings YOY%

Increased Single Family Demand Driving Pricing

30

70

450

25

400

68

20

350

15

300

66

10

250

5

64

200

0

$ Thousands

-5

62

150

-10

% Homeownerhip Rate

100

60

-15

50

-20

58

0

2005Q1

2006Q2

2007Q3

2008Q4

2010Q1

2011Q2

2012Q3

2013Q4

2015Q1

2016Q2

2017Q3

2018Q4

2020Q1

2021Q2

2022Q3

2023Q4

2025Q1

2026Q2

2027Q3

2028Q4

Median Existing Single Family Price YoY% Median Household Earnings YoY%

2000Q1

2001Q2

2002Q3

2003Q4

2005Q1

2006Q2

2007Q3

2008Q4

2010Q1

2011Q2

2012Q3

2013Q4

2015Q1

2016Q2

2017Q3

2018Q4

2020Q1

2021Q2

2022Q3

Homeownership Rate% (LHS) Median Existing Single Family Price (RHS)

Source: Moody’s Analytics, Cushman & Wakefield

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