New residential investment corp is a company focused on owning and operating single-family rental homes in the US. As the housing market rebounds from the pandemic impact, analysts expect New residential investment corp’s stock performance to see steady growth in 2023. Key factors supporting the positive outlook include rising demand for single-family rentals, expansion plans through building and acquisitions, as well as strong property price appreciation. However, risks such as rising mortgage rates and recession fears call for prudent assessment.
Demand for single-family rentals to drive occupancy and rental rates
The single-family rental (SFR) market has seen robust demand growth in recent years, driven by trends such as remote work flexibility, rising home prices, and shifting lifestyle preferences. Industry research projects over 15% demand growth for professionally-managed SFR properties through 2026. For large SFR owners like New Residential Investment Corp with 50,000+ rental homes, higher occupancy and rising rental rates will directly boost revenues and profits over the next few years.
Acquisition-fueled portfolio growth to expand footprint
New Residential Investment Corp plans to expand its SFR portfolio substantially, from around 53,000 homes currently to 80,000 homes by the end of 2023. The company’s strong balance sheet and access to capital should support acquiring 17,000-20,000 homes this year through single-family rental securitizations. Expanding scale will lower operating costs over time and diversify geographic concentration risks, supporting profitability.
Property price appreciation to drive asset value gains
While home price growth is expected to moderate from the heated 2021-2022 pace, most analysts still forecast mid-single digit annual appreciation over the next three years. For New Residential’s portfolio concentrated in fast-growing Sunbelt cities, strong demand trends should sustain property value gains and drive substantial net asset value increase.
Backed by favorable SFR industry trends and strategic expansion plans, Wall Street expects New Residential Investment Corp’s stock to deliver annualized returns around 10% through 2025 – making it a solid sector pick for residential investment exposure.