Invitation Home (NYSE:INVH) reported second-quarter results marked by occupancy above 97%, accelerating new-lease pricing through June and higher funds from operations, while executives raised full-year guidance and highlighted capital deployment through stock repurchases, home sales and construction lending.
President and Chief Executive Officer Dallas Tanner said the single-family rental company’s average occupancy remained above 97% during the quarter, while new-lease rate growth accelerated for a sixth consecutive month. Core FFO per share rose 5% year over year and adjusted FFO per share increased just under 6%, he said.
According to Tanner, John Burns data show it is, on average, more than $1,000 per month cheaper to lease than own a comparable home in Invitation Homes’ markets. Based on the company’s average resident tenure of slightly more than 40 months, he said that represents more than $40,000 of savings for a typical household.
Operating trends strengthen through July
Chief Operating Officer Tim Lobner said same-store net operating income increased 1.5% from a year earlier in the second quarter. The increase reflected 1.6% core revenue growth and 1.9% growth in core operating expenses.
- Second-quarter renewal rent growth averaged 3.3%, rising to 3.7% in June.
- New-lease rent growth was 1.1% for the quarter.
- Blended lease rent growth was 2.7%.
- Turnover improved 50 basis points year over year to 5.7%.
- Average occupancy was 97.1% during the quarter.
Lobner said controllable expenses declined 1% year over year, while fixed costs, including property taxes and insurance, rose 3.5%. He attributed the controllable-cost result to operational execution and said both fixed and controllable expenses were tracking in line with the company’s expectations.
The company’s preliminary July figures showed renewal rent growth of 4.3%, new-lease growth of 1.2% and blended growth of 3.4%. July occupancy averaged 96.5%, which Lobner said reflected normal seasonal move-outs. He said August renewals were shaping up similarly to July, while new-lease growth is expected to moderate through the remainder of the year following its seasonal peak.
Management said supply conditions were improving, though some markets still have excess inventory to absorb. Lobner said build-to-rent deliveries have declined and growth in new single-family rental supply has slowed, while markets that had been most oversupplied were experiencing sharper reductions in unsold new-home inventory.
Home sales fund buybacks and reduce revolver borrowings
Chief Financial Officer Jon Olsen said core FFO was $0.51 per share during the second quarter, up 5% from the prior year, while AFFO was $0.44 per share, an increase of nearly 6%.
Invitation Homes sold 657 wholly owned homes, primarily to end users, for approximately $309 million in gross proceeds during the quarter. It acquired 196 homes from homebuilder partners for about $74 million.
As dispositions have exceeded the company’s earlier expectations, Olsen said Invitation Homes increased its full-year guidance for sales of wholly owned homes by $300 million at the midpoint, to $850 million. Acquisition guidance was unchanged, with midpoints of $250 million for wholly owned homes purchased from builder partners and $100 million through joint ventures.
The company repurchased another $100 million of stock in the second quarter, bringing total repurchases since the program began late last year to $600 million. Invitation Homes has repurchased about 22.8 million shares at an average price of $26.30 each, according to Olsen.
Olsen said the average repurchase price represented an implied value of slightly more than $270,000 per wholly owned home, compared with the company’s year-to-date average home sale price of $450,000. Proceeds from asset sales and free cash flow helped reduce the company’s revolver balance to $280 million at June 30 from $560 million at March 31.
Net debt to trailing 12-month adjusted EBITDA stood at 5.4 times at quarter-end, slightly below the company’s 5.5-times to 6-times target range. Invitation Homes ended the quarter with more than $1.5 billion in available liquidity, with substantially all debt fixed or swapped to fixed rates and approximately 90% of wholly owned homes unencumbered.
Earlier in July, the company issued $500 million of 2032 senior notes carrying a 4.95% coupon. It used net proceeds to prepay approximately half of its 2017-1 securitization, which had a $988 million balance at June 30 and matures next summer.
Guidance rises as management cites second-half risks
Invitation Homes raised its full-year core FFO guidance midpoint by $0.01 to $1.95 per share and its AFFO midpoint by $0.01 to $1.65 per share. The company also narrowed its same-store core revenue and NOI growth guidance ranges around unchanged midpoints.
Olsen said the outlook reflected “cautious optimism,” while noting risks related to seasonally higher turnover, the need to maintain occupancy amid an improving but still elevated supply backdrop, and uncertainty around property-tax assessments. Property taxes represent about 55% of total operating expenses, he said, with California, Georgia and Florida accounting for about 70% of the property-tax line item.
Management also said the disruption created by earlier versions of the ROAD to Housing Act delayed or canceled some ResiBuilt projects scheduled to begin during the first half. As a result, ResiBuilt’s 2026 earnings contribution is expected to trail original expectations, although executives said its development pipeline has begun to refill following the legislation’s passage.
Chief Investment Officer Scott Eisen said the company had begun seeing more interest in smaller acquisition portfolios after legislative uncertainty subsided, though transaction activity remained limited and he did not provide pricing expectations. The company has construction loan commitments, including deals still under diligence, totaling just under $350 million, with roughly 10% funded. Tanner said the loans typically generate high-single-digit yields and may provide an opportunity to acquire completed communities.
About Invitation Home (NYSE:INVH)
Invitation Homes (NYSE: INVH) is a real estate investment trust that specializes in the ownership, operation and leasing of single-family rental homes across the United States. The company focuses on acquiring suburban and urban-adjacent single-family residences and managing them as rental properties for households seeking professionally managed, long-term housing alternatives to traditional homeownership or multifamily rentals.
Operationally, Invitation Homes is involved in the full lifecycle of the single-family rental business: sourcing and acquiring homes, performing renovations and ongoing maintenance, marketing and leasing properties, and providing property management and resident services.
