Earnings Call Transcript - INVH Q4 2025

Operator, Operator

Welcome to the Invitation Homes Fourth Quarter 2025 Earnings Conference Call. As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Scott McLaughlin, Senior Vice President of Investor Relations. Please go ahead.

Scott McLaughlin, Senior Vice President of Investor Relations

Thank you, operator, and good morning. Joining me today from Invitation Homes are Dallas Tanner, our President and Chief Executive Officer; Scott Eisen, our Chief Investment Officer; Tim Lobner, our Chief Operating Officer; and Jon Olsen, our Chief Financial Officer. Following our prepared remarks, we'll open the line for questions from our covering sell-side analysts. During today's call, we may reference our fourth quarter 2025 earnings release and supplemental information. We issued this document yesterday afternoon after the market closed, and it is available on the Investor Relations section of our website. Certain statements we make during this call may include forward-looking statements relating to the future performance of our business, financial results, liquidity and capital resources and other nonhistorical statements, which are subject to risks and uncertainties that could cause actual outcomes or results to differ materially from those indicated. We describe some of these risks and uncertainties in our 2024 annual report on Form 10-K and other filings we make with the SEC from time to time. Except to the extent otherwise required by law, we do not update forward-looking statements and expressly disclaim any obligation to do so. We may also discuss certain non-GAAP financial measures during the call. You can find additional information regarding these non-GAAP measures, including reconciliations to the most comparable GAAP measures in yesterday's earnings release. With that, I'll now turn the call over to Dallas Tanner. Go ahead, Dallas.

Dallas Tanner, President and Chief Executive Officer

Good morning, everyone, and thanks for joining us today. I want to start by thanking our residents for the trust they place in us. That trust is central to our business, and we work every day to earn it through strong service, clear communication and a better resident experience. This morning, I'd like to spend a few minutes on three areas: First, housing affordability; second, our recent acquisition of ResiBuilt Homes, which gives us in-house development capability; and third, our long-term objectives as we head further into 2026. Let me begin with housing affordability, an issue that continues to draw significant attention and represents a significant challenge for many Americans. Renting provides an attractive alternative for many households, which is why since 1965, about one-third of all Americans have rented their home. Yet with only 10% of multifamily apartments offering three bedrooms or more, there is a clear gap in family-oriented rental options. This is where we're proud to lead, providing homes for growing families seeking value, services, and convenience in the neighborhoods they care about. As a result of this focus, we have a clear view of the needs of our customer base, including many first responders, health care workers, teachers, veterans, and other vital community members. We are committed to providing them with well-maintained, high-quality homes. And that commitment matters even more today as higher home prices, elevated interest rates, and large upfront costs have put buying a home out of reach for many households. According to data from John Burns, residents in our markets save nearly $12,000 a year on average by renting their homes, helping families manage their budgets, build savings, and access schools and neighborhoods that might otherwise be out of reach. And for residents ready to take the next step, we help them prepare for it. Historically, more than 20% of our move-outs have been residents who purchased their own home. One way we support that journey is by offering a free company-funded credit building program that reports positive rent payments to the credit bureaus. This allows our residents to build credit from the rent they already pay with us, a benefit most smaller landlords don't or can't offer. We have more than 160,000 residents today currently enrolled, with residents having seen an average credit score increase of 50 points. This strengthens their financial foundation, lowers borrowing costs, and improves their ability to qualify for a mortgage when the time is right. Of course, housing affordability is fundamentally a supply issue, which brings me to my second point. One of the most constructive ways we can help is by adding more homes to the markets we serve. While our homebuilder partnerships have supported that effort for years, our acquisition of ResiBuilt expands it even further and improves our control over cost, product quality, and delivery pace. ResiBuilt is already delivering homes at a pace of over 1,000 homes per year in its Fee-Built business. We expect to grow on that foundation over time to add even more high-quality homes for Americans where demand remains strong. And that leads me to the third topic I outlined this morning, which is our long-term objectives. We laid these out at our November Investor Day, and they continue to guide how we're going to operate in the future. They include: first, delivering attractive same-store NOI growth; second, allocating capital thoughtfully across accretive growth opportunities and share repurchases; third, using our scale and technology to drive efficiencies and elevate the resident experience; and fourth, maintaining a strong balance sheet. Looking back over the past year, we made meaningful progress on each of these priorities. We continue to strengthen our platform and improve the resident experience. We took an important step toward expanding future housing options with the ResiBuilt acquisition. As we move further into 2026, we are reaffirming these objectives with a focus on controlling what we can control. That discipline will continue to guide our decisions as we work to deliver value for residents and shareholders, while expanding housing choice and flexibility in our communities. At the center of our work is a commitment to the people we serve and the people who make our progress possible. To our residents, associates, and shareholders, thank you for your continued trust and partnership. Now before we turn the call over to Tim to discuss our operating results, I've asked Scott Eisen to share a few more details on the ResiBuilt acquisition.

Scott Eisen, Chief Investment Officer

Thanks, Dallas. We're excited to welcome the ResiBuilt team to Invitation Homes. This acquisition accelerates our in-house development capabilities while keeping our upfront approach asset and capital light. ResiBuilt is a best-in-class builder of single-family rental homes, having delivered over 4,000 homes since 2018 in Georgia, Florida, and the Carolinas. Around 70 ResiBuilt employees have joined us, and the team will continue operating under the award-winning ResiBuilt brand. Leading the platform is Jay Byce, a highly respected leader in the build-to-rent development space. Jay will continue serving as President of ResiBuilt and report directly to me. Today, ResiBuilt has 23 active fee built contracts with over 2,000 home starts planned for 2026 and beyond. We expect nearly all near-term activity to remain third-party fee-based, generating capital-light earnings and providing modest accretion to 2026 AFFO. Beyond this currently contracted work, ResiBuilt offers opportunities to develop around 1,500 lots in Atlanta, Charlotte, and Orlando. Over time, we expect to selectively develop homes for the Invitation Homes balance sheet and for our joint venture partners. Together, ResiBuilt capabilities elevate our long-term supply strategy by giving us greater command over product, location, and timing. We expect to unlock new operational efficiencies, achieve more seamless integration, and gain stronger control and foresight across our growth pipeline. These capabilities also provide additional flexibility while complementing the strong relationships we maintain with our national homebuilder and joint venture partners. In short, ResiBuilt strengthens our foundation for future growth and expands the housing options available to families across our markets. With that, I'll turn it over to Tim to walk through our fourth quarter and full-year operating results.

Tim Lobner, Chief Operating Officer

Thank you, Scott, and good morning, everyone. Our fourth quarter and full-year operating results highlight the strength of our platform, the dedication of our associates, and the trust our residents place in us. For the full year 2025, we delivered solid same-store performance with same-store NOI growth of 2.3%, finishing above the midpoint of our guidance range. This was driven by 2.4% core revenue growth and 2.6% core expense growth. In the fourth quarter, same-store NOI grew 0.7% year-over-year, supported by 1.7% growth in core revenues and a 4% increase in core expenses. Resident satisfaction continues to be a central focus and a differentiator for Invitation Homes. Turnover remained low during 2025 at 22.8%, consistent with the prior year and average length of stay remained well over three years. In addition, same-store average occupancy for the year was 96.8%, landing at the high end of our 2025 guidance. These metrics all underscore the stability of our resident base and the quality of the service we provide. Turning now to same-store leasing performance. Fourth quarter blended rent growth was 1.8%. This reflected strong renewal rent growth of 4.2%, which more than offset a 4.1% decline in new lease rates, given that renewals account for about 75% of our total lease book. In January, occupancy held just under 96% and blended lease rate growth improved by 30 basis points from the prior month to 1.5%. Renewal growth was roughly flat with December at about 4%, while new lease rates were down 4.2%. Performance over the past few winter months was broadly in line with our expectations for this time of year and reflects the effect of targeted specials in some of our slower markets where supply has exceeded near-term demand. These concessions helped support steadier occupancy through the softer seasonal period, which should better position us as we move into the spring leasing season. Looking ahead, we remain fully committed to achieving the $0.14 to $0.20 of incremental AFFO per share growth over the next three years that we expect on top of our baseline growth as we outlined at our Investor Day. Operational enhancements are expected to provide roughly half of the projected AFFO growth, and our team remains focused on executing the initiatives to unlock this incremental value. In the meantime, our mission of elevating the customer experience continues to guide our decisions and our daily execution. We are making steady progress modernizing our service model, expanding the use of centralized functions where they can improve speed, consistency, and quality and giving our teams better tools to serve our residents more effectively. These efforts also tie directly into how we control the controllables across the business. There's still more work to do, but we continue to believe our initiatives will drive higher satisfaction and stronger long-term operating performance over the next few years. I'd like to thank all of our teams for their commitment to this work and for the progress they're delivering.

Jonathan Olsen, Chief Financial Officer

Thanks, Tim. This morning, I'll cover three topics: First, our balance sheet and liquidity position; second, our fourth quarter and full-year financial performance; and third, our 2026 guidance. Starting with the balance sheet, we continue to maintain a conservative leverage profile that supports our investment-grade ratings. We ended the year with $1.7 billion in total liquidity, including unrestricted cash and undrawn capacity on our revolving credit facility. In addition, our year-end net debt to adjusted EBITDA ratio remained at 5.3x. Approximately 94% of our total debt was either fixed rate or swapped to fixed rate and approximately 90% of our wholly-owned homes were unencumbered. We have no debt reaching final maturity before June 2027. As previously announced, in October, our Board of Directors authorized a $500 million share repurchase program. Since that time, we've repurchased 3.6 million shares totaling approximately $100 million. We see meaningful value in our shares and expect to continue repurchasing as opportunities permit. Turning now to our financial results. Core FFO for the fourth quarter increased 1.3% year-over-year to $0.48 per share, while core FFO for the full year was up 1.7% to $1.91 per share, primarily due to NOI growth. AFFO for the fourth quarter was generally flat year-over-year at $0.41 per share, while AFFO for the full year grew by 1.8% to $1.63 per share. The last thing I'll discuss is our full year 2026 guidance. This includes our expectation for same-store NOI growth in a range between 0.3% and 2%, driven by expected same-store core revenue growth in a range between 1.3% and 2.5% and same-store core expense growth in the range between 3% and 4%. Our same-store core revenue growth guidance assumes average occupancy of 96.3% at the midpoint, while we expect same-store blended rent growth in the mid-2% range. In addition, our outlook incorporates approximately $550 million of dispositions at the midpoint, which we expect to serve as the primary funding source for additional share repurchases and $250 million of anticipated wholly-owned new home deliveries at the midpoint. Together, these assumptions result in full year 2026 core FFO guidance of $1.90 to $1.98 per share and AFFO of $1.60 to $1.68 per share. For complete details of our 2026 guidance assumptions, including a bridge from 2025 core FFO to our 2026 guidance midpoint, please refer to last night's earnings release. As we embark further into the new year, we believe our operating discipline, capital allocation strategy, and strengthened development capabilities support our ability to remain nimble and focused while continuing to serve residents with quality and genuine care. Combined with a solid balance sheet, clear priorities and steady progress across the business, we believe we are well positioned to deliver long-term value for our shareholders and the families who call our homes their own. That concludes our prepared remarks. Operator, please open the line for questions.

Operator, Operator

Your first question comes from Jana Galan with Bank of America.

Jana Galan, Analyst

Thinking about your expectations for same-store blended rent growth in the mid-2% range. Just curious about the kind of quarter-to-date. It sounded like you said 1.5% so far for blended lease growth. Just how does that track? And then how are you anticipating the peak leasing season to play out this year?

Jonathan Olsen, Chief Financial Officer

Jana, it's Jon. I'll take the first part and then see if Tim wants to add any color. I think the mid-2% blend aligns with where our guidance is coming out. I think 6, 7 weeks into the year, we've only just gotten into peak leasing season. So I think it's a little bit premature to draw any conclusions based on what we've seen thus far. I would note that in terms of top of funnel demand, lead volume feels very healthy compared to last year. I think the challenge for us at the moment, and this was true in the fourth quarter as well, was just the amount of available inventory on our book and in some of the markets where we operate. So I think time will tell. We'll know a lot more about how peak season shapes up the next time we get together. But I would note that each of the last few years, the nature, timing and kind of shape of the demand curve in peak season has changed. So we just want to be judicious in terms of the assumptions we make about the blend.

Tim Lobner, Chief Operating Officer

Thanks, Jon. And I'll add, look, supply and demand dictate our pricing. Supply, we talked about this on past calls, has been slightly elevated in a few of our core markets, namely Florida, Texas, and Arizona. But we are seeing those supply levels come down. And as Jon mentioned, our peak season really starts right after Super Bowl and goes into mid-summer. We're seeing healthy demand, and we look at that through a variety of different metrics, but our lead volume remains strong, clearly a strong indicator that there is demand for single-family housing. We will continue to see over the next couple of months our spreads between renewal growth and new lease growth narrow as our new lease growth expands. Right now, I'll add that we don't have any concessions on our scatter site product. We use that tool as we have in years past to incentivize residents during our slower season. Right now, the only specials that we have going are on our build-to-rent communities, and that's pretty customary for developers and investors during lease-up to achieve stabilization. So we're really happy with the supply and demand fundamentals as they're heading into peak season right now.

Eric Wolfe, Analyst

I think some drafts of the institutional investor ban have been circulating through Congress. I was just curious if you could comment on sort of what you would like to not see in that bill versus what you're advocating for, sort of how you hope the legislation ultimately looks?

Dallas Tanner, President and Chief Executive Officer

Thank you for your question, Eric. We're definitely focused on this issue. At a high level, we've been encouraged by discussions with policymakers from both parties. The recent tweet and executive order were unexpected for the industry. However, we understand the importance of addressing affordability. Through our trade association and our collaborations with companies in the NRHC, we’ve effectively highlighted the role of single-family rentals within the larger market. That said, it's too early to predict outcomes. The industry is looking for clarity on permissible actions. The development of new projects appears favorable based on our discussions, which is exciting for our partnerships with builders and our own platform, ResiBuilt. Throughout these discussions, affordability and the pathway to homeownership have been focal points, aiming to support those transitioning to homeownership over time. We’ve been focusing on this for the past few years to ensure positive credit reporting. Currently, we have about 160,000 residents participating in this program, and we've observed credit scores increase by 50 basis points. These aspects have strengthened our discussions with policymakers about how single-family rentals fit into the broader housing context. It's crucial for us to meet our customers' needs, and many of them are moving from renting to buying. In the last quarter, around 16% to 17% made this transition, with typical rates between 20% and 25%. The current rental costs are about $1,000 a month less than owning, not counting down payment challenges, making our offerings attractive. Customers consistently affirm this through surveys as we seek to enhance our processes. From a legislative standpoint, we are actively engaged and having constructive discussions.

Austin Wurschmidt, Analyst

So I appreciate kind of the decision to step in and buy your shares here and comments around being a net seller and using some of those proceeds to buy back shares. But I guess, Dallas, given your comments about being encouraged with what's happening on the regulatory front, Tim mentioned you're starting to see supply moderate. What would it take for you to really ramp up the buyback even further given that meaningful value that you referenced you see in shares today?

Dallas Tanner, President and Chief Executive Officer

Thanks for the question, Austin. I want to echo what Jon said in his prepared remarks. I mean we see real value there in terms of where the shares are currently trading. We are clear about that at Nareit at the end of the year. Now we certainly have limited windows where you can sort of operate. And then at the end of the day, and I think you guys know us about us, from a capital allocation perspective, we also want to be moderate. We know that we have opportunities on the horizon, both with external growth and some of the opportunities that we'll look at over the coming year. But I think for us, it will be about when the opportunities are available to us, as Jon said, with always thinking about where our current cost of capital is and highest best use on a risk-adjusted basis for economic returns that make sense for our shareholders. So you can certainly argue that if the shares continue to trade in this range that on a risk-adjusted basis, it can make sense to continue to be active there.

Steve Sakwa, Analyst

I was wondering if you could provide a little more commentary around your expense growth assumptions. I know that you guys did a very good job containing expenses and I think handily beat your initial expense outlook for '25. I know you put a few assumptions around taxes and insurance for '26. But maybe just speak to some of those numbers, and they seem a little bit elevated, but maybe there's some tough comps going on. So any clarity around expense growth would be helpful.

Jonathan Olsen, Chief Financial Officer

Yes, Steve, thanks. I think a couple of things are going on there. With property taxes, obviously, the outcome in 2025 was pretty favorable relative to our guidance. I think it's worth pointing out that we had a fairly sizable good guy in Texas last year. And absent that, property tax growth would have been closer to the mid-4s. So the range we've articulated in our guidance, I think, is generally consistent year-over-year. With respect to insurance, a couple of things are going on there. 2025 was a very favorable year for us. It creates a bit of a tougher comp. I think if you look at the property market, we think that, that is going to be a very constructive renewal. It's in the general liability, excess casualty, and auto market that has become materially harder and where we think we'll see some outsized increases year-over-year. So when you put it together, that's the driver around the insurance expense growth. Now our policy year runs from March 1 to March 1. So we'll be buttoning that up in the next one and half weeks and we'll have more information that we can share. Certainly looking at all the levers we can pull to try to drive a better outcome, but we're not going to change the way our program is constructed. We want to make sure that we are well insured. And the insurance market has sort of ebbs and flows similar to other markets. If you look at what that implies for overall controllable expense growth or all other expense growth, I guess, I should say, it's really in the range of 1% to 2%. So we think our cost controls continue to be effective. We continue to be laser-focused on trying to make sure that we are being as efficient as we can be. I think the other thing I would call out with respect to expenses is something that we included in our earnings bridge. I think several of you noted it, but I would just point out that we have incorporated in our bridge an estimate of $0.02 per share related to advocacy and other costs. I want to be clear that, that is an estimate. We've incurred some limited costs to date and the timing and magnitude of any additional costs we incur is a bit of an open question. But we wanted to include something there in the bridge just to be transparent about the likelihood that there will be costs associated with navigating the current regulatory backdrop.

Brad Heffern, Analyst

On the repurchase, I was wondering if you could talk about what the rough maximum amount is that you can accomplish in any given year without running into tax issues or needing to issue a special. I know it varies based on what exactly you're selling with the gains on sale, etc. But I'm kind of wondering if the guidance assumes a number that's sort of close to what the annual maximum might be or if there's upside to that?

Jonathan Olsen, Chief Financial Officer

Thanks. I would just point out that we're not going to get into any specifics about the quantum of share repurchase embedded in guidance. But I would say that as Dallas noted and as I think I touched on in my prepared remarks, when we see a material disconnect between where our shares are trading and what that implies as far as the value of our portfolio and what we view the actual value of our assets to be, we have to evaluate that as an opportunity for capital deployment. And if we look at the relative risk-adjusted returns of the various alternatives available to us, it is hard to conclude that share repurchases aren't a very, very compelling use of funds. So I think what we've outlined in our guidance in terms of capital allocation activity sort of suggests that there will be excess disposition proceeds that should the shares continue to trade at a level that is meaningfully dislocated from the value of our assets, suggest that we'll be active in the market buying back shares.

Haendel St. Juste, Analyst

I wanted to follow up on Jana's question on blend. I appreciate the color, Jon, but I'm still having trouble, I guess, getting to the mid-2% that you mentioned. So maybe some more color on what you're implicitly expecting for turnover, renewal, new lease rates? And then while you're at it, maybe some color on bad debt and ancillary as well.

Jonathan Olsen, Chief Financial Officer

Sure. Thanks, Haendel. We are assuming turnover at the midpoint that is slightly higher than last year. We expect our renewal rate will remain healthy given the favorable value proposition that we talked about in our prepared remarks. But I think the guide also acknowledges that there is a larger volume of rental product competing on the basis of price, and we anticipate that will lead to slightly higher turnover year-over-year. As far as days to re-resident, I would note, again, the supply pressures we're facing in certain of our markets are likely to have a flow-through occupancy impact primarily through longer days on market. We have done a very good job, I think, and tip of the cap to Tim's team in keeping days and turn pretty consistent. But the days in market number has certainly elongated. I think we did about 48 days to re-resident in '25. And my expectation is that in 2026, it will take us a few days longer on average over the course of the year to get new residents into homes and getting them cash flowing. With respect to sort of the components of the revenue growth guide, I would just point out that I think the earn-in from '25 will represent about 105 basis points. Blended rent growth this year is about another 105 basis points. And then the increase in other income contributes about 20 basis points. And so then if you net against that about a 40 basis point deduct for lower occupancy year-over-year, that's how you get to the 190 basis points at the midpoint.

Unknown Analyst, Analyst

This is Emily on behalf of Juan. I wanted to ask if you could talk about what you've seen so far in January across the new lease renewal and blended rates as well as occupancy.

Tim Lobner, Chief Operating Officer

Yes. This is Tim. That's a great question. Yes, we've seen what we would expect to see in early February heading into the new year. Typically, you start to see a higher demand, higher lead volume across the assets. And so we're seeing that materialize in stronger new lease rent growth. On the renewal side, look, the renewal side of the business is a very consistent part of our business. It represents 75% of the book. The renewal rates continue to remain very firm. And I think residents are generally very satisfied with what they're experiencing. We do expect to see, as I mentioned earlier on the call, we do expect to see our spreads start to narrow as we get deeper into spring, and we expect to see that continue until mid-summer. So you can expect to see that blend continue to pick up in these next couple of months.

John Pawlowski, Analyst

Jon, a follow-up question on property taxes. Just given a lot of markets are seeing flat to declining home prices now. Outside of the Texas kind of tough comps associated with Texas, are you seeing signs where municipalities are assessing property taxes more aggressively on investor-owned homes versus owner-occupied because I still think the 4% to 5% guide strikes us as really high given home prices are declining, not really rising that fast.

Jonathan Olsen, Chief Financial Officer

Yes, Jon, it's the right question. Thankfully, we are not seeing a differential treatment of investor-owned homes versus owner-occupant-owned homes. I think any approach to 'property tax relief' that benefits owner occupants at the expense of SFR operators effectively transfers costs from the families that own their homes to families that choose to rent. Our hope is that the folks making those decisions recognize that renters are voters, too. I think with property tax overall, Jon, we just want to be cautious. I think as we've talked about at length, Florida and Georgia are two of our three biggest markets, and we have seen a continuing catch-up in terms of assessed values relative to what we view true market value to be. Just as a reminder, from '22 to '25 in Florida, we saw over 22% home price appreciation. And in Georgia, over that same period, it's over 23%. And so the ability of assessed values to catch up to that market value when it has expanded as rapidly as it has is somewhat limited. In Florida, in particular, a portion of property tax bills are capped such that assessed values on a percentage of the total tax bill can only go up 10%. So structurally, it sets up a multiyear catch-up. And so I think as I take it all together and we look at property taxes, certainly, we're hopeful that we will do better than that. I think, as you know, we've had some nasty surprises if you go back enough years, and that's something that we want to make sure we avoid by just being thoughtful about what is likely to happen at that line item.

James Feldman, Analyst

Thinking about the development with the ResiBuilt platform, do you think you'll need to acquire more platforms to grow your development platform nationwide? Or do you believe you'll remain within the ResiBuilt platform to expand into other markets? Additionally, could you provide more insight into where you plan to build moving forward?

Dallas Tanner, President and Chief Executive Officer

Jamie, thanks for the question. This is Dallas. And I'll also let Scott add anything he wants to add to this. I think at a high level, we feel really comfortable about the capability we just brought in-house. Jay is a seasoned operator in the space. We've known him for over a decade. We've been impressed with the work they've done. They've built out a really remarkable platform in terms of both capability and scale. Scott talked about the 20-plus existing projects they have ongoing, which, by the way, we didn't underwrite this initially, but has led to a lot of great synergies with our lending efforts in terms of opportunity sets and things we're getting an opportunity to look at on that perspective. I don't know that you necessarily have to go out and acquire other platforms to try and grow your development business. I think we've got the capability in-house. It's just a question around which markets do we want to be in and why. And we have a ton of experience prior to the ResiBuilt acquisition of understanding sort of what our costs are in particular parts of the country as we build with partners and the like. And so I think for us, we feel pretty confident that we don't really need to do much outside of manage the mature organization we just brought on and find ways to sort of blend and extend in the right parts of the country over time and over distance. The nice thing about this is this is really accretive in terms of how we think about it. They have a cash flow positive business that does great work in the marketplace with multiple parties. And we can start to look at opportunities, as Scott mentioned in his earlier remarks, that are already sort of in front of us, and we can also sit on the sidelines if we want to until we decide that a particular opportunity makes sense. Scott, anything you want to add to that?

Scott Eisen, Chief Investment Officer

No. Thanks, Dallas. Thanks, Jamie. This is Scott. I think at our Investor Day in November, we shared our long-term vision to create value through our BTR growth strategy that combines construction lending and development. And our announcement of buying the ResiBuilt platform was months of thoughtful planning to advance that vision. The acquisition of Resi is a great step forward for us. They're a best-in-class developer that enhances our execution capabilities, expands our capacity to address the nation's most pressing challenges on housing affordability. We're focused on adding supply in desirable markets and creating communities that families are proud to call home. They're currently focused in the Carolinas and Florida and Georgia, and we're going to continue to leverage their capabilities and boots on the ground in those markets. And that's really where our efforts are going to be focused for the foreseeable future.

Michael Goldsmith, Analyst

The homebuilder partnership pipeline has been moderating and cap rates on acquisitions have also been slowly ticking down. So I was wondering how have your relationships with the homebuilders evolved? And what factors are leading to the slower pipeline and potentially maybe a little bit lower growth from this avenue?

Scott Eisen, Chief Investment Officer

Thanks for the question. The conversation with homebuilders remains very strong. We maintain great relationships with both national and regional builders. However, due to our cost of capital, we have been less aggressive in committing to future transactions with them. This is primarily a strategic signal linked to our cost of capital. Despite this, we continue to see significant opportunities, especially in the end-of-month reports from builders. In the first two months of this year, we have received a considerable amount of deal flow from them. While opportunities still exist, we are being more cautious and attentive to our cost of capital, balancing acquisitions with share repurchases. Nonetheless, our relationships are solid. Last year, we acquired over 2,000 homes from homebuilders. We have ongoing dialogues every day and are being selective in evaluating opportunities from our joint venture partners. Given our current cost of capital, we are taking a less aggressive stance on acquisitions from this pipeline.

Jason Wayne, Analyst

The release mentioned that ResiBuilt could serve as an in-house development contractor. Can you just give some more color around how their team will assist in the process as you're growing out the build-to-rent platform? And then just the longer-term growth profile of the ResiBuilt fee-based business specifically?

Scott Eisen, Chief Investment Officer

Sure. This is Scott. Great question. Look, this platform, the ResiBuilt, we've known these guys for a long time. They commenced operations six or seven years ago in terms of building up their platform. And they're essentially a general contractor that has the capabilities to source land and do construction management oversight of projects. They have a business that historically had built for one particular institutional partner where they acted as a GP. But they also have acted as a fee builder on behalf of other third parties where they've done general contracting work and received payment for performing services on behalf of other equity investors and developers. We will continue to have them work in that business and generate revenue by working with third parties. And over time, they're going to explore opportunities to also perform work both for our joint venture partners and eventually for ourselves when our cost of capital improves. And so I think that they're a full-service GC developer, and they're going to continue to do what they've been doing.

Linda Yu Tsai, Analyst

Just on ResiBuilt delivering 1,000 homes per year, and I know you're going to grow that more over time. But how long would it take to, say, doubling it to maybe like 2,000 homes per year?

Scott Eisen, Chief Investment Officer

I think it's too soon really for us to be speculating on that. These guys have a platform and boots on the ground in place that gives them the ability to perform at least 1,000 home starts a year on behalf of their joint venture partners and customers. And over time, we'll kind of see where the business goes. But I think it's just too soon. We closed on this acquisition five weeks ago. We're still working on integration of them into the platform. I think it's too soon for us to be speculating on things like that.

Jason Sabshon, Analyst

This is Jason on for Jade. So homebuilders are offering rates below 4% in markets such as Phoenix. Can you comment on the supply-demand balance in key Sunbelt markets and whether you're seeing an increase in move-outs to buy?

Dallas Tanner, President and Chief Executive Officer

Jason, thanks for the question. This is Dallas. As I mentioned earlier, we're only seeing about somewhere between 16% and 17% of our move-outs say that the reason they're doing so is because of homeownership opportunity. Now that being said, and we're not mortgage experts, we clearly follow it. There's plenty of supply on the market for sale today. There certainly feels like there's a bid-ask spread between where homes are selling, where a home can be financed at. And you're certainly right in highlighting that builders have had an opportunity to buy down rate, which has helped probably keep home prices somewhat stable over the last couple of years. That being said, on a seasonally adjusted rate, we're still seeing somewhere, I think, just less than 4 million total transactions in a given year. That's really low. Like most economists would tell you that we should probably see somewhere between 5 million, 5.5 million transactions. The amount of inventory in the MLS is almost twice this year of what it was last year. So all of these fundamentals sort of suggest a couple of things to us as we look at the macros. One, there is just a cost of ownership that is pretty egregious at the moment when you consider all things being loaded in. And we pick on mortgage quite a bit, but I think we need to be honest about property tax and insurance. Jon just talked about it. Property tax has been egregious in most states over the last four or five years as it's caught up with the inflationary pressures put on housing prices. And then on the insurance side of the equation, it's been equally as tough, I think, as people think about that fully loaded cost. So that probably has something to do that. And then the fourth multiplier here is at what price can you finance this. And so you're right in the highlight that the builders have an advantage in terms of how they're buying down rate. But it feels like with the 30-year being around six or low sixes, it's got some room to go probably to peak enough curiosity. But let's see how the spring and summer play out.

Jesse Lederman, Analyst

Can you talk through what you're seeing on the supply side of things? Now, of course, new move-in rent growth of negative 4% during the quarter, coupled with a sequential decline in occupancy. We know development starts for BFR down, multifamily has also come down. What are you seeing from a supply perspective in terms of those pressures alleviating?

Tim Lobner, Chief Operating Officer

Yes, this is Tim. That's a great question. Supply in many markets is currently at higher levels than we have historically seen in this industry. There are several factors contributing to this. For one, build-to-rent products have recently entered the market, and we've passed the peak delivery phase in our markets. It’s just a matter of time before demand starts to absorb that supply. Additionally, we are observing an increase in scattered site single-family rentals, both from institutional owners and smaller landlords, as some individuals choose to rent instead of selling their properties. As Dallas mentioned earlier, there is also a market for newly constructed products. Therefore, while we currently have a slight oversupply, it isn't growing, and we anticipate that demand will begin to lessen this surplus. Despite discussions around homeownership being the ultimate goal, many individuals, as reflected in our resident data, prefer to rent. We believe there is healthy long-term demand for our offerings across our markets. We've noted that specific areas, particularly in the Sunbelt, including Florida, Texas, and Arizona, show higher supply levels, which our numbers confirm. However, lead volume remains robust, particularly as many prospective renters are approaching the right age for entering the market. The average age of our residents is approximately 38 to 39 years. Therefore, we are seeing a significant wave of demand for our product. Our renewal rate is around 75%, indicating that a large portion of renters are choosing to continue renting. While we acknowledge there is some concern regarding supply, we consider it to be part of a cyclic trend that is temporary in nature, and we believe demand will gradually alleviate the situation in the upcoming months and quarters.

John Pawlowski, Analyst

I have a two-parter, forgive the two-part question. Tim, your comments that there are zero concessions on your scattered site portfolio, does that represent a meaningful improvement from this time last year? And then secondly, for renewals that have already gone out for, I guess, March and April, are we expecting the achieved renewal rate to still hover in this 4% range? Or should it be worse or better?

Tim Lobner, Chief Operating Officer

John, those are great questions. I’ll address each one. Regarding concessions, we typically offer specials during the winter months, which can vary based on the current market supply and demand dynamics. We're quite flexible, and our pricing structure enables us to focus on these specials. Historically, this cycle, we've provided $500 off, and for a two-year lease, we've added an additional $250. These specials are currently not in effect, as we have noticed an increase in demand, making it unnecessary to use such incentives right now. However, we have offered them in previous years. Now, could you remind me of your second question?

John Pawlowski, Analyst

Yes. Again, maybe a clarification on the first one. Again, are concessions a lot lower than this time last year across your platform? The second question is on achieved renewals that are for renewals that are due, that become effective in March and April? Do we expect the effective renewal increases still in the 4% range? Or should it be better or worse?

Tim Lobner, Chief Operating Officer

I think it will hover around the 4% range in answer to your renewal question. It could go a little bit lower, it could go high, but 4% has been very consistent for us, and we continue to see about 75% of the book, maybe a little bit more renew. And getting back to your concession question, look, it's not any more or less than last year. This is typical for what we do, and we take it off this time of the year as we see the market return into our peak leasing season.

Operator, Operator

That concludes our question-and-answer session. I will now turn the call back over to Dallas Tanner for closing remarks.

Dallas Tanner, President and Chief Executive Officer

We want to thank everyone for their participation today, and we look forward to seeing everyone at the upcoming investor conference. Talk soon.

Operator, Operator

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.