HouseCanary, Inc. has launched the HouseCanary Rental Investment (HCRI) Index, allowing single-family rental investors, as well as lenders and renters, to benchmark the health of the single-family rental market, the company recently announced. The HCRI Index measures Effective Gross Yield, a profitability metric, at national, state and zip code levels.
“We believe that making this information widely available will increase transparency, improve the availability of financing, and drive further investment in the single-family rental asset class, ultimately benefiting the millions of Americans who are choosing to rent and the U.S. housing market more broadly,” says Jeremy Sicklick, co-founder and CEO of HouseCanary.
As of March 15, 2017, the Effective Gross Yield—computed as the current fair market value annualized rent minus estimated property tax, divided by the current fair market home value—is 7.7 percent. New England and Western states trail the rest of the country, with accelerating home price appreciation in the West contributing to weaker yields. This trend is strong in California, the state with the lowest Effective Gross Yield at 5.2 percent.
Indiana and Mississippi, conversely, have the highest Effective Gross Yield at 11.8 percent. Throughout the Midwest and South, Effective Gross Yield has continued at elevated levels. Florida, Georgia, and the Carolinas—hot spots for investment from major institutional and public portfolios—remain among the highest performing markets. States showing the highest potential Effective Gross Yields are Alabama, Ohio, and Louisiana.
The HCRI Index will be calculated and available by state and metro area on a quarterly basis through a scheduled press release, with zip code and census block level data available at www.housecanary.com/rental-investment-index.
For more information, please visit www.housecanary.com.
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