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The U.S. rental market has cooled off since the red-hot heights of the Pandemic Housing Boom when national multifamily rents surged +16.4% and single-family rents jumped +13% year-over-year in the early months of 2022. However, the slowdown has not been uniform. Last year, many U.S. rental markets saw multifamily rent growth continue to lag behind single-family rental growth, with some regions even seeing outright declines. Early data for 2025 suggests this trend is continuing.  According to LendingOne’s analysis, nationally aggregated multifamily rents rose +2.7% year-over-year in January 2025, while single-family rents climbed +4.4%.  This growth gap indicates that demand for single-family rentals remains elevated, while multifamily rent growth faces more downward pressure—with the strength of this trend varying greatly by market.  To see which multifamily and single-family rental markets have seen the most rent growth in the last 12 months, LendingOne analyzed data from the Zillow Observed Rent Index (ZORI). Using the ZORI time series data, LendingOne analysts calculated the year-over-year shifts in rent for single-family and multifamily properties by metro area. Top-line findings from LendingOne’s latest rent analysis: Single-family rental growth, while subdued compared to the Pandemic Housing Boom days, continues to outperform multifamily rental growth across most U.S. markets.  Small and mid-sized markets in the Northeast and Midwest are seeing the strongest rental growth—for both multifamily and single-family properties. The weakest rental markets are concentrated in the Southeast, with markets like Austin, Cape Coral, and San Antonio experiencing outright multifamily rent declines since January 2024.   National Rent Change: 12-Month Shift   Change in Metro-Level SFR Rents Between January 2024 and January 2025     Top Metros for Single Family Rent Growth Among the 200 largest metros with sufficient data, these are the 20 metros with the highest single-family rent growth from January 2024 through January 2025: Atlantic City, NJ: +14.4% Manchester, NH: +10.9% Reading, PA: +10.4% Huntington, WV: +9.7% Salinas, CA: +9.6% Santa Cruz, CA: +9.6% Flint, MI: +9.4% Green Bay, WI: +9.3% Kalamazoo, MI: +9.1% Evansville, IN: +9.0% Norwich, CT: +8.3% Topeka, KS: +8.1% Fort Smith, AR: +7.9% Salisbury, MD: +7.7% St. Louis, MO: +7.7% Cleveland, OH: +7.6% Charleston, WV: +7.6% Santa Maria, CA: +7.4% Youngstown, OH: +7.4% Merced, CA: +7.2% Atlantic City, NJ stands out as the strongest single-family rental market, with a remarkable year-over-year rent growth of +14.4%. Many of the city’s Northeastern neighbors, including Manchester, NH (+10.9%) and Reading, PA (+10.4%), join it at the top of the ranks. This region is strong due to tight housing inventory, limited new construction, expensive neighboring cities, and home price appreciation pushing up rental demand. The Midwest is also performing well, with cities like Flint, MI (+9.4%) and Kalamazoo, MI (+9.1%) seeing strong single-family rent growth. The region’s relative affordability and increasing demand for rental properties as more people seek budget-friendly housing options amid rising homeownership costs puts upward pressure on rent growth.  Notably, select areas in California are seeing strong single-family rent growth as metros like Salinas (+9.6%) and Santa Cruz (+9.6%), due to limited housing supply and high demand.   Change in Metro-Level Multifamily Rents Between January 2024 and January 2025 Top Metros for Multifamily Rent Growth Among the 200 largest metros with sufficient data, these are the 20 metros with the highest multifamily rent growth from January 2024 through January 2025: Reading, PA: +12.8% Atlantic City, NJ: +12.0% Lynchburg, VA: +9.5% Erie, PA: +9.1% Duluth, MN: +9.0% Hartford, CT: +8.8% Shreveport, LA: +8.6% South Bend, IN: +8.6% Worcester, MA: +8.5% Tuscaloosa, AL: +8.3% Salinas, CA: +8.2% Bremerton, WA: +8.1% Bridgeport, CT: +8.0% Fayetteville, AR: +8.0% Peoria, IL: +7.9% Montgomery, AL: +7.8% Norwich, CT: +7.8% Charleston, WV: +7.8% Jackson, MS: +7.8% Lansing, MI: +7.7% The Northeast and Midwest are home to the strongest markets for year-over-year multifamily rent growth. Reading, PA leads with +12.8% year-over-year rent growth, followed by Atlantic City, NJ (+12.0%) and Lynchburg, VA (+9.5%).  Meanwhile, the weakest rental markets—for both multifamily and single-family rent growth—tend to be those that overheated during the pandemic boom times. In metros across Texas, Florida, Colorado, and Utah, a large wave of new apartment and single-family construction was delivered in 2023 and 2024, largely driven by multifamily projects and a homebuilding frenzy financed during the period of ultralow interest rates. Some of the downward pressure on rents in these markets could ease as more new inventory is absorbed.  That being said, even in the softer rental markets, single-family rental growth is still faring better than multifamily with 26 metros seeing outright declines in multifamily rents from January 2024 to January 2025, versus only two markets seeing single-family rents drop in that time, according to LendingOne’s analysis.  Big Picture: This year is positioned for another year of single-family rent growth outpacing multifamily rent growth in both the strongest rental markets in the Northeast and Midwest, as well as softer markets across Texas and Florida, where new construction has put downward pressure on rent growth.    Note: The ZORI index is a repeat-rent index that tracks typical market rates by averaging listed rents in the 35th to 65th percentile range, weighted to reflect the full rental housing stock rather than just current listings. 

During the Pandemic Housing Boom, a surge in housing demand, low mortgage rates, and rapid home price appreciation spurred a wave of home flippers into the market, as short hold times and rising values made quick resales highly profitable. Since then, however, higher borrowing costs, compressed margins, and slower price growth have significantly slowed U.S. home flipping activity. Despite strained housing affordability, certain metro areas can still be considered great markets for home flippers—particularly in those where home prices are still rising, inventory remains tight, and flipper return potential remains strong. To identify the best markets for home flipping in 2025, LendingOne evaluated the following data for 183 metro area housing markets: Year-over-year change in home prices between December 2023 and December 2024, according to the Zillow Home Value Index Year-over-year change in active housing inventory for sale between January 2024 and January 2025, as measured by our analysis of Realtor.com data Active housing inventory for sale at the end of January 2025 compared to January 2019, as measured by our analysis of Realtor.com data The typical gross profit on home flips in Q3 2024, according to ATTOM Data The typical gross return on investment (ROI) on home flips in Q3 2024, according to ATTOM Data LendingOne’s methodology logic is based on the idea that the tightest housing markets are those where active inventory remains well below pre-pandemic 2019 levels and home prices are rising at an elevated year-over-year rate. These conditions create an environment where flippers are most likely to see appreciation while holding a property this year. To validate this, we also analyzed home flip success in the latest reported quarter to ensure flippers in these markets are still turning a profit. Let’s take a look at the top 10 markets for home flippers in 2025.   #1 Rochester, NY Typical home value: $252,247 Year-over-year home price change: 8.2% Typical flipping gross profit: $95425 Q3 2024 Gross ROI: 78% Inventory compared to pre-pandemic 2019 levels: -58% Rochester’s housing market has emerged as the top spot for home flippers in 2025, thanks to surging buyer demand and extremely tight inventory. The city’s relatively affordable home values, steady economic growth, and proximity to natural attractions like the Finger Lakes and Niagara Falls have made it one of the hottest real estate markets in the country. The market is also supported by a robust local economy with companies like Wegmans Food Markets and Paychex employing thousands of residents. With these factors combined, Rochester is poised to offer home flippers strong returns in a thriving, evolving market.   #2 Rockford, IL Typical home value: $195,139 Year-over-year home price change: 9.7% Typical flipping gross profit:: $54250 Gross ROI: 47% Inventory compared to pre-pandemic 2019 levels: -63% Rockford, IL is an ideal market for home flippers in 2025, with the typical home valued at under $200,000 according to the December Zillow Home Value Index. Its affordable housing is in sharp contrast to the Chicago metro’s steep prices, making it an attractive option for those seeking a move less than two hours away. With hybrid work models here to stay, many are now open to living further from city centers to expand their homebuying options. Rockford has benefited from this trend, making it a strong market for profitable home-flipping activity.   #3 Atlantic City, NJ Typical home value: $361,464 Year-over-year home price change: 7.4% Typical flipping gross profit: $144000 Gross ROI: 83% Inventory compared to pre-pandemic 2019 levels: -58% Atlantic City is an ideal market for home flippers in 2025, with property prices significantly lower than in nearby parts of New Jersey. The city is on a development kick, with infrastructure improvements and a focus on attracting tourism creating strong demand for both short-term rentals and long-term homes. In January 2025, development group DEEM Enterprises announced it’s secured $3.4 billion in funding for a new waterfront community, featuring a Formula 1 raceway and hundreds of green-energy condominiums. Additionally, Atlantic City’s proximity to major metropolitan areas like New York City and Philadelphia makes it an attractive option for commuters seeking more affordable housing while still maintaining access to these urban hubs.   #4 Syracuse, NY Typical home value: $234,398 Year-over-year home price change: 9.9% Typical flipping gross profit: $65000 Gross ROI: 44% Inventory compared to pre-pandemic 2019 levels: -55% Syracuse is a top market for home flippers, offering affordable housing, job growth, and access to nature. The city’s lower housing costs make it ideal for purchasing and renovating properties. Micron’s new megafab in nearby Clay, NY, is set to create nearly 50,000 jobs over the next two decades, driving increased demand for housing. Syracuse also has some of the country’s oldest housing stock, so there are a lot of structures in need of restoration and repair. The city’s proximity to natural landscapes like the Adirondacks and Finger Lakes further enhances its appeal.   #5 Scranton–Wilkes-Barre, PA Typical home value: $205,173 Year-over-year home price change: 6.3% Typical flipping gross profit: $90000 Gross ROI: 100% Inventory compared to pre-pandemic 2019 levels: -47% Scranton, PA, is among the most affordable markets in the country, with a typical home priced at just $205,173, making it a prime location for home flippers seeking value. The city also boasts one of the oldest housing stocks in the country, providing numerous opportunities for renovations and restorations. Scranton’s low property taxes further enhance its appeal, offering homebuyers and investors a cost-effective environment for property investment. Additionally, Scranton’s proximity to major urban centers like Philadelphia and New York City adds to its appeal, as commuters can enjoy more affordable living without sacrificing access to these bustling hubs.   #6 Reading, PA Typical home value: $290,014 Year-over-year home price change: 6.7% Typical flipping gross profit: $95000 Gross ROI: 78% Inventory compared to pre-pandemic 2019 levels: -55% Reading, PA, is a prime Rust Belt market for home flippers in 2025, offering affordable entry costs and strong resale potential. Home prices continue to climb yet remain well below the national average, allowing investors to buy low and sell high. Just over an hour from Philadelphia, Reading’s steady price growth and strong demand mean increasing profit margins for flippers. Despite higher interest rates, buyers continue to find value, making it an ideal location for profitable renovations and quick resales.   #7 Cleveland, OH Typical home value: $229,735 Year-over-year home price change: 6.4% Typical flipping gross profit: $94000 Gross ROI: 78% Inventory compared to pre-pandemic 2019 levels: -46% Cleveland, OH, has become a prime market for home flippers in 2025, with home prices continuing to climb through 2024. Despite this surge, the median home price remains significantly below the national average, offering investors affordable entry points. The city’s diverse economy is anchored by massive organizations like the Cleveland Clinic and Cleveland-Cliffs as well as several Fortune 500 companies. Additionally, Cleveland’s older housing stock provides ample opportunities for value-adding renovations. With rising property values, a strong job market, and abundant renovation prospects, Cleveland offers substantial profit potential for home flippers in 2025.   #8 Akron, OH Typical home value: $218,294 Year-over-year home price change: 6.3% Typical flipping gross profit: $90500 Gross ROI: 85% Inventory compared to pre-pandemic 2019 levels: -43% Akron, OH, is quickly emerging as a strong market for home flippers in 2025, thanks to its affordability, steady home price growth, and proximity to Cleveland. Akron benefits from the economic and job opportunities of the larger metro area while maintaining a more budget-friendly housing market. With inventory still limited, competition for properties is intensifying, but the lower home prices create room for profitable renovations and strong returns.    #9 Springfield, MA Typical home value: $350,714 Year-over-year home price change: 6.1% Typical flipping gross profit: $140000 Gross ROI: 74% Inventory compared to pre-pandemic 2019 levels: -50% Springfield, MA, stands out as an ideal market for home flippers, particularly because it boasts one of the oldest housing stocks in the region. With limited space available for new development, existing homes are the primary source of market activity, boosting demand for fix and flip projects. The city’s homes are also relatively affordable—sitting well below the Massachusetts average. Flippers in Springfield have opportunities to restore historic homes while investing in the city’s growing market. Additionally, the market’s proximity to larger metropolitan areas like Boston enhances its desirability, drawing buyers seeking affordable housing within reach of major job markets.   #10 Canton-Massillon, OH Typical home value: $203,126 Year-over-year home price change: 7.9% Typical flipping gross profit: $55190 Gross ROI: 45% Inventory compared to pre-pandemic 2019 levels: -42% Canton, OH, is emerging as an attractive market for home flippers, offering a combination of affordable housing and historical charm. Known as the birthplace of the NFL and home to the Pro Football Hall of Fame, the city’s old housing stock presents ample opportunities for renovation and restoration. The local market is experiencing steady home price appreciation, creating strong potential for profitable flips. With inventory levels significantly lower than pre-pandemic levels, demand for homes is high, driving competition. Additionally, Canton’s proximity to Cleveland adds appeal, attracting buyers seeking affordable homes with access to larger job markets.   Big Picture: While home flipping activity has slowed nationally since the Pandemic Boom, there are still strong home flipper markets in Rust Belt cities and smaller metros in the Northeast and Midwest, where affordable housing, rising prices, and tight inventory create profitable conditions for renovations.

The 2025 home flipping environment is active but cautious, with demand for fix and flip properties and a growing focus on rental conversions. However, expectations for growth across all markets remain muted, and regional challenges like inventory, competition, and rising costs impact sentiment.  In this article, you’ll see the full results of our first LendingOne-ResiClub Fix and Flip Survey. Real estate investors that reported that fix and flips were a part of their investment strategy were eligible to respond to the survey, fielded from February 1 to February 19, 2025. ResiClub, our partner for the survey, is a news and research outlet dedicated to covering the U.S. housing market. Our findings reveal that the home flipping market in the Northeast remains particularly hot, as price appreciation, tight inventory, and aging housing stock create investment potential for fix and flip projects. However, home flippers in the region face intense competition for properties and elevated purchase prices.  Topline Findings  1. Home Flipper Sentiment and Intent  Fix and Flip Activity:  89% of home flippers plan to conduct at least one fix and flip in 2025.  64% plan to convert at least one fix and flip project into a rental using the fix-to-rent method.  Market Outlook:  78% describe the demand for fix and flip properties as strong in 2025, with 32% saying “very strong.” In the Northeast, 59% of home flippers described demand as “very strong.”  64% of survey participants expect the fix and flip market to stay the same (47%) or weaken (17%) in 2025.  2. Financial Considerations  Renovation Costs:  Home flippers in the Northeast spend the most, with 34% investing over $200,000 per project.  56% of U.S. home flippers say kitchen upgrades provide the best return on investment. 3. The biggest concerns across U.S. markets, according to home flippers  Northeast: Housing inventory is the biggest challenge (34%).  Midwest & Southwest: Competition for properties is reported as the top concern among flippers (31% and 34%).  Southeast: Interest rates are the biggest challenge, with several home flippers specifically noting trouble accessing enough financing for projects  West: Labor and material costs are the top challenge (24%).   How Likely Flippers Are to Conduct a Fix and Flip in 2025   How Many Fix and Flips Investors Complete in a Year   Average Timeline of Project from Purchase to Resale   Renovations with Best ROI   Share of Home Flippers Who Own SFR Properties     Current State of Flippers’ Primary Fix and Flip Market     Biggest Challenges Home Flippers Face in Current Market   How Flippers Describe Demand for Flips in Their Primary Market      How Flippers See the Market Evolving in the Next 12 Months      Average Budget for Fix and Flip Renovations   Biggest Challenges Faced with Fix and Flip Projects

Active listings and months of supply are crucial indicators of home price momentum. Analysts at LendingOne believe that a rapid increase in active listings can signal potential price weakness as homes take longer to sell. Conversely, a steep decline in active inventory often indicates a heating up housing market as demand absorbs available inventory.   What are we seeing today?   At the end of January 2025, U.S. active inventory still sits below pre-pandemic levels, at 25.3% below what it was in January 2019. However, national active inventory levels have grown 24.6% year over year, reaching 829,376 in January 2025—a 56% increase from January 2021, when housing inventory hit a historic low. That suggests the housing market has cooled over the past year, giving buyers more leverage in most housing markets.  Analysts at LendingOne looked over the latest inventory data to better understand what could await real estate investors this spring and summer.   LendingOne’s top-line findings:  National housing inventory isn’t high, which puts a floor under national home prices in 2025. Inventory levels in 2025 are higher than the past few years, indicating buyers in many markets—especially in the Sun Belt—have more opportunities than the past few years. Some markets, particularly in the Northeast and Midwest remain very tight, with active inventory levels still a fraction of what they were before the Pandemic Housing Boom.   National Active Housing Inventory for Sale     While some housing markets remain seller-friendly, with active inventory levels more than 50% depleted from six years ago, others have moved toward balance—or even into buyer’s market territory. In particular, some Mountain West and Southern metros have seen their active listings climb substantially.    Among the 100 largest metros 10 metros where active listings in January 2025 were up the most since January 2019:  Lakeland, FL: +52% Colorado Springs, CO: +40% McAllen, TX: +35% San Antonio, TX: +33% Spokane, WA: +25% Cape Coral-Fort Myers, FL: +22% Memphis, TN-MS-AR: +21% New Orleans-Metairie, LA: +20% Denver-Aurora-Centennial, CO: +19% Orlando-Kissimmee-Sanford, FL: +19% 10 metros where active listings in January 2025 were down the most since January 2019:  Hartford, CT: -80% Bridgeport, CT: -80% New Haven, CT: -72% Albany, NY: -71% Providence, RI: -67% Rochester, NY: -64% Allentown-Bethlehem-Easton, PA-NJ: -64% Syracuse, NY: -60% Worcester, MA: -60% Portland-South Portland, ME: -58%     Metro areas where active inventory has grown above pre-pandemic 2019 levels have generally seen home price growth slow, with some even experiencing outright price declines in the past year. For example, in Cape Coral, Florida where the active listing level is 22% higher than it was in January 2019. home prices have fallen -6% year-over-year.  Meanwhile, the country’s tightest housing markets are seeing the strongest price growth. In Hartford, Connecticut—where inventory remains among the lowest—home prices have risen 7% over the past year. Big Picture: Rising housing inventory in 2025 is giving homebuyers more negotiating power in many markets. However, persistently tight supply in the Midwest and Northeast continues to drive price appreciation in those regions.

During the Pandemic Housing Boom, surging demand fueled by low mortgage rates and remote work flexibility caused active inventory levels to drop sharply nationwide. Builders couldn’t keep up, and active inventory for sale was drained by red-hot demand, leaving markets with historically low supply. Analysts at LendingOne believe that a key indicator to watch throughout 2025 is regional active inventory levels relative to pre-pandemic levels in 2019. Markets where active inventory is furthest below pre-pandemic levels are likely to remain strong, with sellers retaining the upper hand. Conversely, in markets where active inventory significantly exceeds pre-pandemic levels, housing markets are expected to be softer, with weaker pricing momentum—offering investors and buyers increased leverage. To identify the nation’s 10 strongest and 10 weakest housing markets of 2025, LendingOne compared current active inventory levels to those of the same month in 2019. The analysis also incorporated year-over-year inventory growth, year-over-year home price shifts, and the three-year change in median days on market. In total, we examined the nation’s 250 largest metro area housing markets.   LendingOne’s Topline Findings: A number of small and mid-sized metros in the Northeast and Midwest lead the list of the strongest housing markets in 2025. These markets are driven by persistently low active inventory levels and greater affordability compared to many other regions in the country. In contrast, several Southern markets, including many in Florida and Texas, rank among the weakest and softest housing markets currently, offering homebuyers and investors some leverage. These markets have seen a significant inventory increase and cooling demand. The 10 Strongest U.S. Housing Markets in 2025 These are the 10 strongest markets to start 2025: Erie, PA Rockford, IL  Bloomington, IL Manchester, NH Hartford, CT Binghamton, NY Rochester, NY Norwich, CT Albany, NY Atlantic City, NJ According to LendingOne’s analysis, the strongest housing markets in 2025 are characterized by a combination of rising home prices, limited active inventory, and fast property turnover. These qualities signal potential for price appreciation, rental income growth, and sustained market expansion in the coming year.  Northeastern and Midwestern metros dominate this list. Compared to high-cost coastal or Sunbelt markets, homes in these regions remain more affordable, attracting first-time buyers, downsizers, and remote workers seeking budget-friendly housing.  Several cities at the top of LendingOne’s ranking fit this description, including Rockford, Illinois, less than 100 miles from Chicago, as well as Hartford and Norwich, Connecticut, and Atlantic City, New Jersey, which serve as commuter hubs for New York City. A lack of homebuilding in Midwest markets like Rockford, IL, and Northeast markets like Manchester, NH, further contributes to the tightness of these markets. Without significant pressure from homebuilders offering mortgage rate buydowns to boost sales in this affordability-challenged environment, existing home sellers across much of the Northeast and Midwest remain just about the only option for buyers.   The 10 Weakest U.S. Housing Markets in 2025 These are the 10 weakest markets to start 2025: Punta Gorda, FL  Cape Coral, FL Huntsville, AL Lakeland, FL Killeen, TX Palm Bay, FL Lubbock, TX Colorado Springs, CO Naples, FL Ocala, FL Florida stands out as the home state of many of the weakest markets in 2025. This is largely due to high active inventory levels, as the state is grappling with unabsorbed new supply from a construction frenzy that followed the Pandemic Housing Boom and a pullback in housing demand. Many Florida markets heavily rely on home buyers who are moving to the region or are purchasing a second home. Sky-high condo HOA fees, rising property taxes, and soaring insurance premiums—exacerbated by a high risk of extreme weather-related damage—have priced out would-be buyers in many markets in Florida.  Not to mention, Florida’s condo market is feeling the aftereffects of regulations passed following the Surfside condo collapse in 2021. As a result, home price growth in many Florida housing markets is significantly weaker than a few years ago. Indeed, from November 2023 to November 2024, home prices fell -7.8% and -5.9% in Punta Gorda and Cape Coral respectively, according to LendingOne’s analysis. Big Picture The strongest U.S. housing markets heading into 2025 are small and mid-sized metro areas in the Northeast and Midwest, where tight inventory and strong demand drive home price growth. Meanwhile, high inventory levels and cooling demand are weighing down or softening many Southern housing markets.

The real estate investment landscape is looking brighter and more promising as 2025 begins. Following a period of significant changes resulting from the pandemic, real estate investors are now benefiting from more stabilized borrowing costs and a clearer economic outlook. As the housing market steadies and for-sale inventory returns to normal levels, we expect more favorable buying opportunities to emerge in some markets. While investors haven’t seen the significant pullback in mortgage rates many had hoped for when the Federal Reserve began its rate-cutting cycle, several factors are coming together that could make 2025 a year of opportunity for investors. Here are a few things to know as the 2025 housing market kicks off. Election Uncertainty Is Behind Us—and It’s Fueling Momentum Uncertainty surrounding elections can significantly impact major capital and investment decisions. We saw a build-up of decisions that did not happen for a few months leading up to the election. There’s always going to be a psychological component to the housing sector and our investors were seeking more certainty on housing, interest rates, and economic policies. With the political landscape now more transparent, we’re seeing a first-hand tangible uptick in deal-making and long-term planning. While there’s still uncertainty surrounding the 2025 fiscal policy agendas, some investors who had delayed decisions last year are jumping back into the market. Improving Investor Sentiment Among single-family investors we surveyed in Q4 2024, 76% say they are either “very likely” (55%) or “somewhat likely” (21%) to buy at least one investment property in 2025. This marks improving investor confidence: In our Q3 2024 survey, just 60% of single-family investors said they were “very likely” (38%) or “somewhat likely” (22%) to buy at least one investment property in the next 12 months. While single-family investors may not be overly bullish, they are cautiously optimistic. 76% expect at least mild home price appreciation in their local market in 2025, and 84% plan to raise single-family rents this year. Inventory Is on the Rise Total active listings for sale are beginning to rebound in certain parts of the country, even as new listings remain subdued. Much of this rise in active inventory has been concentrated in the Southwest and Southeast, areas that experienced significant demand during the pandemic housing boom. As active inventory climbs, investor buyers in these regions gain some negotiating power. Analysts at LendingOne expect year-over-year growth in U.S. active inventory to continue in 2025. It might not be a big inventory jump, but it will help move housing into a more balanced market. Big Picture As the U.S. housing market evolves in early 2025, I expect investment activity to rise and investors to adapt to the changing market. Institutional and retail investors are recalibrating to meet the demands of a market characterized by stabilized interest rates and normalizing inventory. While challenges persist, particularly around affordability and supply, opportunities are available for those with more value-added strategies. Inventory and days on the market of properties requiring renovation have increased, which is positive for real estate investors going into the year.

The 2025 outlook for single-family investors is cautiously optimistic about rental demand, rent growth, price appreciation, but it’s tempered by concerns over rising costs and interest rates. Overall the good news is, investors are more optimistic and plan to purchase more than just last quarter. Single-family rental investors appear poised to navigate these dynamics with a focus on strategic acquisitions and market adaptability. In this article, you’ll see the full results of our fourth quarter LendingOne-ResiClub Single-Family Rental Investor Survey. Investors who own at least one single-family investment property were eligible to respond to the LendingOne-ResiClub SFR Investor Survey, fielded between November 14 and November 26. ResiClub, our partner for the survey, is a news and research outlet dedicated to covering the U.S. housing market. “We have found that clients have resumed making decisions after the election and focused on their acquisition strategies for 2025,” says LendingOne CEO Matthew Neisser. “They are more likely to add to their portfolio compared to last year primarily because they are bullish on rental demand, driven by a continued lack of rental inventory.  As the housing market steadies and for-sale inventory returns to normal levels, we expect more favorable buying opportunities to emerge in some markets. At the same time, investors should temper expectations for outsized rent increases like 2021-22 and focus on sustainable, data-driven investment strategies to maximize long-term returns.    Topline Findings 1. Investor Sentiment and Intent Purchase Intent: 76% of single-family investors plan to buy at least one property in 2025. Sale Intent:  33% of single-family investors plan to sell at least one property in 2025. Market Outlook: 87% predict strong rental demand in 2025. 76% expect positive home price appreciation in 2025. 40% expect mortgage rates to be below 6% by the end of 2025. 2. Financial Considerations Rising Costs: 58% of investors were impacted by rising home insurance premiums. 37% identified home insurance as their biggest increased expense in 2024. Rental Income: 84% plan to raise rents in 2025, with 40% expecting increases over 4%. 3. Regional Trends Southeast and Southwest: These regions experienced the highest impact from rising home insurance premiums. Investor Confidence Rises  Back when we surveyed single-family investors in July, when mortgage rates were slightly higher than today, 60% said they were either “very likely” (38%) or “somewhat likely” (22%) to buy over the next 12 months. In our latest survey, fielded late last month, 76% of single-family investors say they are either “very likely” (55%) or “somewhat likely” (21%) to buy at least one investment property in 2025. Simply put, investors are feeling a bit more confident as we approach 2025. “The survey results highlight both the resilience and adaptability of single-family investors as they look ahead to 2025,” Matthew Neisser continued. “Strong rental demand and mild expectations for rent growth underscore the opportunities in this space, but rising costs—especially insurance—and a divided outlook on mortgage rates remind us that careful planning will be key.”   Investment Plans and Strategies   How likely single-family rental investors say they are to buy another investment property in the next 12 month   How likely single-family rental investors say they are to buy another investment property in calendar year 2025   How likely single-family rental investors say they are to sell any of their investment properties in calendar year 2025   How single-family rental investors define their primary investment strategy Market Conditions and Trends   How single-family rental investors describe home price momentum in their primary investment market in 2024   How single-family rental investors expect home prices to shift in their primary rental markets in calendar year 2025   What single-family rental investors expect the average 30-year fixed mortgage rate to be at the end of 2025     Rental Demand and Pricing   How single-family rental investors describe rental demand in their primary investment markets in 2024   How single-family rental investors expect rental demand to be in their primary investment markets in 2025 How much single-family rental investors plan to raise rents in calendar year 2025   Financial Impact and Expenses   How single-family rental investors say rising home insurance premiums impacted their cash flow in 2024

Over the past few years, U.S. housing affordability has significantly worsened. The aftermath of the Pandemic Housing Boom saw home prices soaring, mortgage rates more than doubled, and the cost of repairs, insurance, and property taxes also shot up. That’s all led to fewer people being able to afford to buy homes, and as a result, homeownership has decreased in some markets. With higher financial barriers to buying a home, in many markets, a larger share of households have turned to renting instead. This bump in rental demand presents potential opportunities for real estate investors, particularly in metros where renting has become more prevalent. To see which markets are more primed for investor activity, LendingOne analyzed year-over-year changes in the rental share of housing units—or “rentership”— across the 75 largest metros by population. LendingOne’s Topline Findings: 47 of the largest 75 U.S. metros saw year-over-year growth in their rental share. Renting remains the most popular in the most expensive housing markets, namely San Jose, Los Angeles, and New York City The metro areas that made the biggest year-over-year rental share gains were Toledo, Cape Coral, and Minneapolis.  Top Five Metros with the Most Rentership Growth Year-Over-Year:   Toledo, OH (+8.7 percentage points) Cape Coral-Fort Myers, FL (+8.5 percentage points) Jacksonville, FL (+7.7 percentage points) Minneapolis-St. Paul-Bloomington, MN-WI (+7.7 percentage points) Portland-Vancouver-Hillsboro, OR-WA (+7.0 percentage points) Annual Shift in the Share of Local Households that are Renters Population Growth and Housing Trends In general, most markets see both the number of homeowners and the number of renters increase over time as the overall population ticks up. However, if the pace of renter household formation significantly outpaces owner household formation, then that could indicate a deterioration in home affordability in that region.  Affordability Pressures in Growing Renter Households While populations tend to grow across both renters and homeowners, when renter household formation significantly outpaces owner household formation, it signals that home affordability is deteriorating. In metros like Toledo and Cleveland, home prices have outpaced wage growth, making homeownership increasingly difficult.  In places like Jacksonville and Cape Coral, soaring home insurance premiums and condo HOA fees are pricing out many would-be buyers, causing the share of renters to rise.  Consistent Trends in High-Rental-Share Metros Despite these shifts, the metros with the highest rental shares remain largely consistent, reflecting long-standing trends in affordability. The most expensive markets, with limited housing supply, tend to have the highest rental share. Meanwhile, more affordable areas with room for new development typically see lower rentership rates and higher homeownership. Five metros with the largest rental share in Q3 2024: San Jose-Sunnyvale-Santa Clara, CA (52.0%) Los Angeles-Long Beach-Anaheim, CA (50.8%) New York-Newark-Jersey City, NY-NJ-PA (49.1%) San Diego-Carlsbad, CA (48.0%) Fresno, CA (47.4%) Five metros with the smallest rental share in Q3 2024: Cape Coral-Fort Myers, FL (21.8%) Charleston-North Charleston-Summerville, SC (23.7%) Columbia, SC (24.5%) Allentown-Bethlehem-Easton, PA-NJ (27.2%) Detroit-Warren-Dearborn, MI (28.2%) Share of Local Households that are Renters Big Picture: As housing affordability conditions worsened over the past few years, the share of renting households has ticked up a bit in some markets, creating opportunities for investors.

If you’re getting started as a real estate investor, you may have heard about the BRRRR method. BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat and is a popular five-step investment strategy. The BRRRR method involves purchasing distressed or undervalued properties, renovating/rehabbing them, and renting them to tenants. Once rehabbed and rented, the property gains value, which the investor can leverage to refinance, using that money to purchase another property so they can repeat the process. Let’s dive into each step of the process and talk about the advantages, challenges, and financing options investors should know before getting started.   What is the BRRRR Method? One of the prerequisites to the BRRRR strategy is that the property is purchased below market value. This is an essential component, as you’ll need to build enough equity to recover your original investment quickly. Here are some points to consider in each step in the BRRRR method:   Buy Step 1 in the BRRRR method is Buy. You’ll need to identify a suitable property first. Ideally, it will be one that requires some upgrades but still has desirable qualities that make it worth the investment. Potential is key! A distressed property in a great location is one example, or perhaps a building that’s under foreclosure or bank-owned. Be sure to conduct a thorough inspection before you commit. A good rule of thumb is not to purchase any property for more than 70% of its post-rehab value. That gives you a 30% buffer for repairs, and you’ll still have enough equity for a refi when you’re done. This is occasionally called the 70% rule or the maximum allowable offer (MAO). MAO is the maximum you can pay upfront and still make a profit. Other metrics investors typically use to evaluate deals include the after-repair value (ARV). You can estimate this amount by adding the added value from the repair to the purchase price or by looking at similar properties in the area to gauge the fair market value. So, for example, if your ARV is $750,000, your MAO is $525,000. Rehab Once the deal is completed, it is time to start on step 2 of the BRRRR method: rehabbing the property, upgrading, and repairing it so it’s ready for tenants. Upgrades could be purely cosmetic or more extensive, but the ultimate goal is to make it a desirable place to rent. Choose your upgrades based on what will give you the most bang for your buck. Updating bathrooms and kitchens, finishing basements, new paint, and refinishing floors are just a few examples. Rent When your property is ready to occupy, you’ll move on to step 3 in the BRRRR process: finding suitable tenants.  Rental income covers your expenses, so do your due diligence to ensure they will make good tenants who will stay long-term. The rent should be enough to cover your mortgage payments with some profit on top of it. Keep your property maintained, be a responsive landlord, and keep the lines of communication open. Refinance Once your property is occupied and income-generating, it’s time to refinance. In step 4 of the BRRRR process, you’ll want to use the equity you’ve built in the property as collateral, and pull out of your initial investment plus whatever additional equity there is so you can repeat the process with a new property. You’ll need to have owned the property for a minimum period before you can refinance, replacing the existing mortgage with a new one at more favorable terms. In the case of a cash-out mortgage, the refinanced amount will be more than what’s owed, and you will receive the balance in cash. Repeat The fifth and final step in the BRRRR method is to use the funds you received through your refinance to go back to step 1 and start the process over again. The goal is to keep repeating this same strategy as you build out your overall portfolio for more profit and better returns.   Advantages of BRRRR for Investors The BRRRR method is an excellent way for investors to scale their portfolios—as long as the variables are in your favor. The main benefits of the BRRRR method are: Requires minimal investment. If the property is undervalued enough and you can do most of the rehab work yourself, there is massive profit potential. High ROI. Depending on what you paid for the property, there’s excellent potential for generating a high return on your investment over time. Easily scalable. The steps are easy to follow, and if your first property was a success, you’ll have learned from the process and will know what you’re facing for future investments. Great passive income potential. If you find great tenants, you’re in a good position to achieve steady cash flow. Equity building. As you build equity through the rehab process, you could net better interest rates, lower payments, and more buying power that you can leverage into new investments.   Challenges of the BRRRR Method Sometimes, it isn’t so easy to lock into the right circumstances with BRRRR. Here are some of the challenges you could face. Finding the right property isn’t always easy. The success of your BRRRR strategy hinges on purchasing the right property at the right price. Careful evaluation is essential to ensure your efforts and investment are worthwhile. It’s speculative. There’s always a chance you won’t find suitable tenants, or the property won’t gain value, putting your investment at risk. It’s hard work. Managing rental properties isn’t for everyone. It can be extremely time-consuming and stressful, especially with multiple properties or tenants. All the pieces need to be in place to ensure success. High up-front costs. You’ll need to ensure you can cover the down payment, renovation costs, and operating expenses until the property is income-generating, which could be a barrier for some investors.   Financing Options for the BRRRR Strategy You have a few options for financing your BRRRR strategy, but a fix to rent loan is recommended as it is tailor-made for BRRRR. Fix to Rent loans are essentially two loans in one. Investors start with a fix and flip loan that covers both the purchase and repair costs of the property. Once the rehab is complete and the investor is ready to rent the property long-term, you have the option to roll into a 30-year fixed-rate rental loan. Working with the same lender when you are ready for the refinance can prove beneficial as they already have your documents on file, you are familiar with your loan advisor, and they may offer incentives for continuing to work with them. Ultimately, this is a fast and simple solution for investors looking to purchase income properties they intend to own long-term, which goes to the heart of BRRRR. Speak to a loan advisor to see if you qualify for a fix-to-rent loan.   Final Thoughts on BRRRR Real estate investing is an excellent way to build wealth and equity, and the BRRRR method may be what you need to achieve your investment goals. Choosing the right financing partner is critical, as success hinges on the right rates and terms. The qualified lending advisors at LendingOne will work with you to ensure you have the best financing vehicles to get you where you want to be. Contact us today, or take a moment to request a quote. We specialize in real estate investment loans and are here to help.