Is Single Family Rental Rate Growth Decelerating in the Back Half of 2022?
The September run-up in interest rates currently has the conventional 30-year mortgage rate trending near 6.5%.
The spike in mortgage rates has only put more pressure on the affordability picture, with renting continuing to be the more attractive option relative to purchasing a home. As a result, this dynamic continues to fuel strong demand for rentals and persisting strength in leasing momentum for the single-family REITs.
Even after going through a strong peak leasing season, the single-family REITs continue to operate from a position of strength. The persisting record low turnover rates have kept occupancy levels near historical highs, as many residents are opting to renew leases over testing the market with the risk of signing at a higher market rental rate.
The strong leasing momentum could present more revenue upside potential if seasonality on new lease rates does not return in full force.
Holiday trading across most of our coverage has been strong, given the non-discretionary nature of the first uninterrupted holiday since 2019. We expect this to have been funded by a sharp rise in unsecured credit in December 2022.
Second-generation biofuels are the poster-child products of the circular economy. Biorefineries offer efficient utilization of biomass, represent a low-carbon transportation fuel solution by reducing greenhouse gas (GHG) footprint by up to 90% versus fossil fuels, and help tackle the challenge of reducing our dependence on fossil fuels.
New-economy companies' focus on profitability added to top-line growth pressure in 2022 besides offline economy reopening. We remain positive on the ASEAN-6 e-commerce growth potential, as market penetration remains low at 12% (as of 2022E).
