Invitation Home Q2 2026 Earnings Call Transcript

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Provided by Quartr
July 30, 2026

Key Takeaways

  • Positive Sentiment: Invitation Homes reported solid second-quarter results, with core FFO per share up 5% year over year to $0.51 and AFFO per share up nearly 6% to $0.44. Average occupancy remained high at 97.1%, while renewal and blended lease-rate growth strengthened.
  • Positive Sentiment: Management raised full-year core FFO and AFFO per-share guidance to $1.95 and $1.65, respectively, and increased the midpoint of wholly owned home-disposition guidance by $300 million to $850 million.
  • Positive Sentiment: The company repurchased another $100 million of stock in the quarter, bringing total buybacks since late 2025 to $600 million at an average price of $26.30 per share. Management views repurchases as highly accretive because shares imply a substantially lower value per home than recent asset-sale prices.
  • Positive Sentiment: Leasing fundamentals and the supply outlook are improving, with new-lease growth accelerating through June, renewal growth reaching 4.3% in July, and build-to-rent deliveries and rental listings moderating in several oversupplied markets. Management said demand remains healthy and is cautiously optimistic about the setup for 2027.
  • Negative Sentiment: Management highlighted second-half execution risks from seasonal turnover, elevated supply in some markets, and still-uncertain property taxes, which represent a significant portion of operating expenses. ResiBuilt’s 2026 earnings contribution is also expected to fall short of initial expectations because legislative uncertainty delayed or canceled projects.
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Earnings Conference Call
Invitation Home Q2 2026
00:00 / 00:00

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Operator

As a reminder, this conference is being recorded. At this time, I would like to turn the conference over to Scott McLaughlin, Senior Vice President of Investor Relations. Please go ahead.

Scott McLaughlin
Scott McLaughlin
SVP of Investor Relations at Invitation Homes

Thank you, operator, and good morning. Joining me today from Invitation Homes are Dallas Tanner, our President and Chief Executive Officer, Tim Lobner, our Chief Operating Officer, Jon Olsen, our Chief Financial Officer, and Scott Eisen, our Chief Investment Officer. Following our prepared remarks, we'll open the line for questions from our covering sell-side analysts. During today's call, we may reference our second quarter 2026 earnings release and supplemental information. We issued this document yesterday afternoon after the market closed, and it is available on the Investor Relations section of our website at www.invh.com. Certain statements we make during this call may include forward-looking statements relating to the future performance of our business, financial results, liquidity and capital resources, and other non-historical statements, which are subject to risks and uncertainties that could cause actual outcomes or results to differ materially from those indicated.

Scott McLaughlin
Scott McLaughlin
SVP of Investor Relations at Invitation Homes

We describe some of these risks and uncertainties in our 2025 Annual Report on Form 10-K and other filings we make with the SEC from time to time. Except to the extent otherwise required by law, we do not update forward-looking statements and expressly disclaim any obligation to do so. We may also discuss certain non-GAAP financial measures during the call. You can find additional information regarding these non-GAAP measures, including reconciliations to the most comparable GAAP measures, in yesterday's earnings release. With that, I'll turn the call over to Dallas Tanner. Go ahead, Dallas.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

Thanks, Scott, and good morning, everyone. It's been a busy peak season for us. Before getting into the quarter, I want to thank our residents for the trust they keep placing in us and our field teams for how they've handled the pace. Together, we delivered a strong second quarter. Average occupancy held above 97%. New lease rate growth accelerated for the sixth month in a row, and we grew core FFO per share by 5% and AFFO per share by just under 6%. Tim and Jon will get into the details, but it's a great foundation heading into the second half of the year. I'll kick off my comments by talking about the 21st Century ROAD to Housing Act. The law was enacted earlier this month, providing greater clarity for our business and the broader housing industry.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

Among other things, the act includes some meaningful provisions into speeding up and encouraging new construction. That's a goal we fully support, since we've long known that better housing affordability is achieved by increasing new supply. In fact, that's been precisely our approach at Invitation Homes, growing through new construction and home builder partnerships. We're pleased that the law lets us keep doing what we do best, offering a valuable housing solution to the millions of Americans who choose to lease while helping deliver the new supply this country needs. That commitment goes well beyond supply. For our residents, that means continuing free positive credit reporting, helping them build credit simply by paying their rent on time. For policymakers, it means staying closely engaged with Treasury and HUD and others as these new regulatory guidances take further shape. Beyond the legislative backdrop, demand for our homes remains healthy.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

According to the latest data from John Burns, on average, it's over $1,000 per month cheaper to lease today than to own a similar house in our markets. Based on our average resident tenure of just now over 40 months, that adds up to more than $40,000 in total savings for a typical family. That is a compelling value proposition, along with favorable demographics and the convenience of leasing will continue to support our demand. Turning now to capital allocation. The story during the second quarter was similar to the first quarter. Stock repurchases remained among the most attractive uses of our capital. During the second quarter, we bought back another $100 million of stock, which brings us to $600 million in stock repurchased since December at an average price of a little over $26 per share.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

These share repurchases have been funded in large part by home sales priced well above where the public market is valuing our assets. We are also starting to see early signs of a thaw on the acquisition side. Deal flow has been relatively stagnant over the first six months of 2026, thanks to the legislative uncertainty. With the ROAD to Housing Act now settled, more sellers are coming to market, including some attractive smaller portfolios. It's still early, but encouraging, since it gives us another lever for accretive capital deployment. Similarly, we see opportunities in our development and our lending channels. ResiBuilt's pipeline has re-accelerated following some disruption earlier this year when the bill was still in flux. On the lending side, construction loan commitments, including some still in diligence, now total just under $350 million, with about 10% of that funded so far.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

As a reminder, these loans typically yield in the high single digits and give us the opportunity to purchase the community once they're built. Zooming out, at our Investor Day last November, we talked about building the best-run SFR platform in the country. It's disciplined on cost and capital, but also focused on the resident experience. That discipline has been on full display in three ways so far this year. First, capital allocation, selling homes at a premium, redeploying that capital into accretive opportunities. Second, growth, supporting our platform through the acquisition of ResiBuilt and the expansion of our construction lending business. Third, in resident satisfaction, reflected in the renewal and retention numbers Tim will walk through shortly. In short, we're doing exactly what we said we were going to do.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

Combined with what Tim and Jon are about to cover, our first-half performance gave us confidence to raise our full-year guidance. I'll let Jon cover the specifics here. The takeaway is that Invitation Homes continues to generate strong and stable cash flows, selling homes at a premium to where the market is valuing our assets and recycling that capital creatively create value for our shareholders. Tim, over to you.

Tim Lobner
Tim Lobner
COO at Invitation Homes

Thanks, Dallas, and good morning, everyone. I'll start with the headline. New lease rate growth accelerated every month, January through June, capping off peak leasing season on a high note. Our second quarter same-store renewal rate was approximately 77%. An average length of stay for our residents remained over 40 months. The data points reflect high level of resident satisfaction with both our homes and our service. Turning now to our second quarter same-store results. NOI grew 1.5% year-over-year, driven by 1.6% core revenue growth, core operating expense growth of just 1.9%. I'll touch on a few more details behind each of those items. On the revenue side, renewal rent growth rose through the quarter from just over 3% in April and May to 3.7% in June, averaging 3.3% for the second quarter.

Tim Lobner
Tim Lobner
COO at Invitation Homes

Second quarter new lease rent growth was 1.1%, combined, that resulted in second quarter blended lease rent growth of 2.7%. Turnover improved 50 basis points year-over-year to 5.7%, and average occupancy for the quarter landed at 97.1%. Both strong results for the summer season. On the expense side, the best news is on the controllables, where expenses we manage on a day-to-day basis were down 1% year-over-year. It's a really good reflection how our teams are running the business. Fixed costs, including property taxes and insurance, increased by only 3.5% year-over-year. We're pleased to see both controllable and fixed expenses tracking in line with our expectations year to date. Supply backdrop across our markets is telling a similar story. Build-to-rent deliveries have continued to decline.

Tim Lobner
Tim Lobner
COO at Invitation Homes

While SFR listings remain elevated, the pace of new supply growth has slowed sharply since the start of this year. In addition, according to John Burns, the markets that were the most oversupplied are now seeing the sharpest drops in unsold inventory of new homes. There's still a bit of supply to work through in some markets, the trend has clearly been moving in the right direction. We'll continue to keep a close eye on this as we move through late summer and into the fall. This slower supply growth, the steady demand that Dallas described, and strong execution from our teams are all showing up directly in our numbers. New lease rate growth picked up every month through this year through June before easing, as we'd expect for late summer, 1.2% in July.

Tim Lobner
Tim Lobner
COO at Invitation Homes

Renewals followed their own path, staying in the low 3% range for April and May before accelerating to 3.7% in June and 4.3% in July. That brings our preliminary blended lease rate growth for July to 3.4%, while average occupancy for July, 96.5%, reflecting normal seasonality from summer move-outs. Taken together, this was a strong operating quarter. We headed into the back half of the year with real momentum on renewals, well-managed expenses, a healthy demand, and improving supply backdrop. Proud of how our teams have shown up for our residents this year and how their efforts have made results like these possible. Jon, I'll hand it over to you.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Thanks, Tim. Today, I'll cover our second quarter financial results, capital allocation activity, the balance sheet, and our updated guidance. Starting with our results. Second quarter core FFO per share was $0.51, up 5% year-over-year, and AFFO per share was $0.44, up nearly 6% year-over-year. On the capital side, during the second quarter, we sold 657 wholly-owned homes, primarily to end users, for gross proceeds of about $309 million. We bought 196 homes, all from our home builder partners, for about $74 million. Combined with our first quarter activity, this pace of dispositions has run well ahead of our original expectations, which is why we increased our full-year disposition guidance for wholly-owned homes by $300 million at the midpoint to $850 million.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Our acquisitions guidance remains unchanged, with midpoints of $250 million for wholly-owned homes from our home builder partners and $100 million through our joint ventures. We also deployed another $100 million for stock repurchases in the second quarter for a total of $600 million of share repurchases since we started the program late last year. Since that time, we've repurchased approximately 22.8 million shares at an average price of $26.30 per share. For reference, this average repurchase price represents an implied value of just over $270,000 per wholly-owned home. That's a significant discount compared to our year-to-date actual average sale price of $450,000 per home. We used proceeds from this quarter's asset sales, along with free cash flow, to reduce our revolver balance from $560 million as of March 31st to $280 million as of June 30th.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

We ended the second quarter with a net debt to trailing 12-month adjusted EBITDA ratio of 5.4x, or just below our 5.5x-6x target range. Turning to the balance sheet more broadly, it remains in great shape. We ended the quarter with over $1.5 billion of available liquidity. Substantially all of our debt is at fixed rates or swapped to fixed rates, and approximately 90% of our wholly-owned homes were unencumbered. We also took steps to strengthen that balance sheet profile even further, taking advantage of favorable market conditions earlier this month to issue $500 million of senior notes maturing in 2032 at a 4.95% coupon. We used the net proceeds to prepay approximately half of our 2017-1 securitization, which had a $988 million balance outstanding as of June 30th. That matures next summer.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Because the offering and prepayment both occurred in July, their impact isn't reflected in our June 30th financial statements or supplemental schedules. We've provided the pro forma impact on certain metrics in a footnote to supplemental schedules 2B and 2C. Reflecting on our year-to-date operating results and the benefit of this year's stock buyback activity, we raised full-year core FFO and AFFO per share guidance this quarter with midpoints up $0.01 each to $1.95 and $1.65 respectively, alongside the disposition guidance increase I mentioned earlier. With the first half of the year now behind us, we also narrowed our same-store core revenue and NOI growth guidance ranges around unchanged midpoints, reflecting improved visibility into the balance of the year. All told, we have a strong balance sheet, good operating momentum, and multiple ways to keep creating value for our shareholders. This concludes our prepared remarks.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Operator, please open the line for questions.

Operator

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, please press star one again. Just a reminder to limit yourself to one question only. If you have additional questions, please rejoin the queue. Your first question comes from the line of Eric Wolfe with Citi. Please go ahead.

Eric Wolfe
Eric Wolfe
Analyst at Citi

Hey, thanks. You mentioned that you were starting to see some smaller portfolios come to market. Could you talk about how you think those portfolios will price from a cap rate and unlevered IRR perspective? Assuming you take part in any of these deals, how would you fund them?

Scott Eisen
Scott Eisen
Chief Investment Officer at Invitation Homes

Thanks for the question. This is Scott. In terms of the market right now, we're not seeing any large transactions at this point. We've probably seen some smaller portfolios in the sub-$100 million, maybe slightly bigger than $100 million size range. I think it's too early to really talk about price guidance and returns on it because we really haven't seen a lot of transaction activity. I would say that post ROAD to Housing Act, if for the first six months of the year things were really quiet just because people were waiting to see where the legislation turned out. I think now that the act has been passed, I think we're seeing some capital start to open up again and start to test the waters and see where the market is.

Scott Eisen
Scott Eisen
Chief Investment Officer at Invitation Homes

It's too soon to say exactly where we think transactions are going to price, but I would definitely say that activity has sort of picked up since the legislation got passed.

Operator

Your next question comes from the line of Jamie Feldman with Wells Fargo. Please go ahead.

Analyst at Wells Fargo

Hi, thank you. You've got Connor on with Jamie. Could you provide an update on July new renewal and blended lease rate growth? As we think about the second half of this year, what are you assuming for those metrics, and especially with the seasonal moderation new lease, particularly given the easier comps and more first-half-weighted expiration schedule?

Tim Lobner
Tim Lobner
COO at Invitation Homes

Hey, Connor. Great question. Thank you. This is Tim speaking. As prepared or as discussed in our prepared remarks, let me run through what we had in July. July, our renewals was at 4.3%, really happy with that. That accelerated out of our Q2 number, which was 3.3%. On the new lease side, we are at 1.2%. That's coming off a 1.8% in June. We saw a nice acceleration through Q2. On the blended side, that was 3.4%. As I shared also in the prepared remarks, we were really pleased with how the year has progressed and continues to progress. Every month on the blended side, we've seen favorable upward movement. Look, as you think about the back half of the year, as we share at several of the investor conferences, there's a regular cadence to how the industry moves, right?

Tim Lobner
Tim Lobner
COO at Invitation Homes

Let's just start with occupancy because that also informs us on how we go about our rent rate. Occupancy, you start the year and you continue to grow into peak season. During peak season, you see a lot of households move out. Typical time for families to move out of houses. You see occupancy moderate a bit. Towards the very end of the year, you see it pick up, that puts us back into the new year.

Tim Lobner
Tim Lobner
COO at Invitation Homes

As it relates to rent growth, let me break it down. Obviously, the blend is really just a reflection, like a 75% reflection of the renewal side of the house, and about a 25% reflection of the new lease. New lease, you guys saw our numbers from Q1. We started out negative. That kind of picks up as you go through the year. That positive number held out. We saw it go, and actually we plateaued in June, which was really strong. That's later in the year than we saw in 2025. We expect that to moderate through the balance of the year. On the renewal side, that's probably the most consistent part of our business. We typically see over the course of the year, it varies between 3.5%-4.5%, which again, is really important because that's 75%-80% of the book of business.

Tim Lobner
Tim Lobner
COO at Invitation Homes

That's how we expect to see it for the balance of the year, and we're really liking how we've seen the year shape up so far. As for August, obviously, we don't know what new lease growth will be for August, but renewals in August are shaping up much like July. We're really happy with how the portfolio is performing and how the teams are executing.

Operator

Thank you. Your next question comes from the line of Steve Sakwa with Evercore ISI. Please go ahead.

Steve Sakwa
Steve Sakwa
Analyst at Evercore ISI

Yeah, thanks. I appreciate all the comments on the revenue side. Maybe just touching on expenses, which I think moderated a bit Q1 to Q2. Maybe just what are some of the puts and takes as you look in the back half of the year, and as you think about kind of your overall 2026 number, and we sort of start to think about next year? I guess, what are the puts and takes we should be thinking about to next year's expense growth?

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Yeah, Steve, I think the big one is obviously always property tax. We have probably three, four weeks before we start to get preliminary views on value and then maybe another 30 days, month and a half before we start to get actual bills in the door. That's always a big consideration. I think what's really striking to me is how effective the focus on cost controls around the controllable side of the house has been. I think the team has been making really thoughtful decisions about how they approach the service side of the house. I think we're really pleased that total turn costs are looking quite favorable. As I think about puts and takes, to me, the big question mark at this point in the year is always property tax.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

I think vis-a-vis the rest of the expense line items, we are really happy with what we're seeing, and we're really pleased with where we are in the year, recognizing there's still a good bit of the year yet to go.

Operator

Thank you. Your next question comes from Jana Galan with Bank of America. Please go ahead.

Jana Galan
Jana Galan
Analyst at Bank of America

Thank you. Good morning. Jon, on the guidance increase, can you speak to any one-timers that may have benefited the second quarter or any offsets you expect in the second half of the year that caused the FFO run rate to come down?

Jon Olsen
Jon Olsen
CFO at Invitation Homes

I think with respect to the guide, I guess I'd point out a couple of things. As I just said, firstly, we have half a year to go. The second half of the year presents potentially a higher degree of execution risk, just based on the fact that, as Tim outlined, this is normally the seasonal period where you see turnover tick up a little bit. The quantum of homes that we're taking back, that we need to get turned and back out into the market and released is something we're going to be really focused on, as we think about defending occupancy in the second half of the year. Secondly, as we've talked about, a lot of times, higher turnover in the second half of the year has the potential to impact both the revenue and expense side of the P&L.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Obviously, any turnover we experience in the second half does create some degree of execution risk, given that the supply backdrop, while improving, remains elevated. We want to be mindful of that. Thirdly, as I just outlined with Steve, at this point in the year, property taxes are still largely unknown. As a reminder, the three largest states are California, Georgia and Florida. California and Georgia are both around 14% of total property tax. Florida is about 41%. Those three states are 70% of a line item that represents about 55% of our total OpEx. That is always going to be a consideration when that's still kind of waiting for further clarity.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

What's maybe most notable is given the disruption that some of the earlier versions of the ROAD to Housing Act caused, we do expect the ResiBuilt contribution to 2026 earnings is going to come in a bit behind our original expectations. Projects that were in flight continued, there were a number of projects that were scheduled to start in the first half that were delayed, and in some cases even canceled. We're going to have a little bit of a shortfall that we want to try to overcome there. The good news is the team is doing a really great job of refilling that pipeline now that the uncertainty overhang has been removed. It remains to be seen how much of that benefit can be recouped in the second half of 2026 versus rolling into 2027.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

When we put all those considerations together, we think our guidance continues to reflect cautious optimism, while at the same time acknowledging that there are some unknowns and some execution risks and a decent chunk of the year yet to go.

Operator

Thank you. Your next question comes from Buck Horne with Raymond James. Please go ahead.

Buck Horne
Buck Horne
Analyst at Raymond James

Thanks. Good morning. Congrats, guys. A question from a higher level. One of your multifamily peers, Sun Belt, highlighted that in quarter-over-quarter, they saw a big in-migration of new leases coming from out of market. If you guys might have detected or tracked anything similar in terms of new lease demand, kind of migrating into some of your Sun Belt markets from out of market.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

Insightful question, Buck. This is Dallas, and Tim, if you have anything to add, feel free to add in. It's interesting. We survey going in and going out, and in our second quarter surveys, roughly 85% of our move-ins were in-state move-ins in the second quarter based on that survey data. It's not like we're seeing any major dislocation or out-of-state folks coming in. It's usually about 50% of those, by the way, are moving sort of city to city. They're trying out a new area. They want to be close to job corridors, transportation corridors. They're testing out a neighborhood before they buy. We haven't seen anything that's sort of dramatic in terms of, call it, net migration shifts. Tim, would you add anything to that?

Tim Lobner
Tim Lobner
COO at Invitation Homes

I wouldn't add anything specific to our survey data as it relates to our residents. If you look at about 65%, 70% of our markets, we are seeing projected net favorable migration into our markets, and those are primarily Sun Belt markets, which I think is favorable for the long-term prospects of our portfolio. I think you touched on the IH decision making that goes into where people are living, I think the broader macroeconomic migratory patterns are favorable as well.

Operator

Thank you. Your next question comes from the line of Ami Probandt with UBS. Please go ahead.

Ami Probandt
Ami Probandt
Analyst at UBS

Hi, thanks. Other core revenue declined in the quarter after being up over 10% in the last quarter. I was wondering, what are the moving pieces within this line item, and how do you expect it to trend for the remainder of the year?

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Hey, it's Jon. Thanks for the question. I think it's important to remember that other property income is comprised of both lease fees and value-add service revenue. The decrease this quarter was driven primarily by lower lease fees, including lower late fees and other administrative charges. Value-add service income was actually up about 9% year-over-year, and we continue to see that as an area of growth for us. Year-to-date, other property income has increased almost 5%, and we do expect to continue to see strong growth from that line item the rest of the year.

Operator

Thank you. The next question comes from Brad Heffern with RBC. Please go ahead.

Brad Heffern
Brad Heffern
Analyst at RBC

Yeah. Hey, everybody. Just a follow-up question on the blends. You almost always see third quarter lower than second quarter, just given new lease pricing falls off. This year, the July blends are obviously up. It sounds like renewals will continue to be strong and above second quarter level. Just wondering if we should expect blends to buck the normal seasonal trend and increase in the third quarter.

Tim Lobner
Tim Lobner
COO at Invitation Homes

Yeah, look, we generally don't give too much of our projection numbers before it happens, right? As I mentioned earlier, our renewal numbers that we're seeing in August look much like our July numbers. We're really happy with the strength of what we're seeing in the marketplace. Typically, you do see the blended rate come down in Q4. You see that kind of taper off. That's a function also of filling the portfolio. Again, we're really happy with how the market is continuing to find its footing. I think the year's shaping up as we expected, and to be honest with you, we're liking how it's going to set up for 2027.

Operator

Thank you. The next question comes from John Pawlowski with Green Street. Please go ahead.

John Pawlowski
John Pawlowski
Analyst at Green Street

Hey, good morning. Jon, can you speak to the third-party management business as well as construction lending? Are those business lines and the contribution to earnings trending better or worse than you expected? Any color as to the drivers would be appreciated.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Sure. Yeah. That's a good question, John. I think they're trending generally in line with our expectations. We are seeing, I think year-to-date, about $4 million lower on 3PM fee income. That's driven primarily by the fact that we sold a number of homes on behalf of Starwood. It's really just a function of a lower average home count, as well as the fact that we had about $2.8 million of non-recurring disposition fees in 2025. That is also coloring kind of the year-over-year comp. As far as the lending business goes, Scott should chime in with anything he thinks I've overlooked, we're actually really pleased with how that is going. Things got pretty quiet while the ROAD to Housing Act was underway.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Similar to what we're seeing on the acquisition side, since clarity has been sort of realized, I think there's a lot more interest and inbound activity. The team continues to originate what we think are really interesting deals on real estate that we have a high degree of conviction around. It continues to be, I think, a really compelling area of growth for us. We're actually a little bit ahead of where we thought we would be at this point in the year, which is great considering that we had about six months of kind of dislocation in the marketplace.

Scott Eisen
Scott Eisen
Chief Investment Officer at Invitation Homes

Yeah, the only thing I'd add to that is, look, the program is going according to plan.

Scott Eisen
Scott Eisen
Chief Investment Officer at Invitation Homes

Right, as Dallas said in his introduction, we're on track for, based upon what's either closed or under commitment right now, call it approximately $350 million of loans. Again, first principles are still the same. We want strong sponsors with BTR development in communities where we have boots on the ground, we have local market knowledge of those areas and communities that potentially we could purchase upon stabilization. Nothing has changed in terms of the design of the program. Nothing's changed in terms of the buy box. We're going to do the right deals in the right markets. We're being measured in our pace. We're going to do the right loans with the right counterparties when the time is right. We're on track, and we're pleased with the program.

Operator

Thank you. Your next question comes from Haendel St. Juste with Mizuho Securities. Please go ahead.

Haendel St. Juste
Haendel St. Juste
Analyst at Mizuho Securities

Hey, guys. Good morning, thanks for taking the question. I wanted to go back to Eric's earlier question about portfolios. I know that you're not seeing any larger portfolios out there today just yet, but I'm curious how you are weighing those opportunities potentially against other capital allocation options on the menu today. Where would pricing for some of these portfolios need to be for you to be interested? I think a few years back, pricing for larger portfolios were in the low to mid five. I think you did your last larger portfolio deal back in 2023 with Starwood. Curious overall how you're thinking, assessing the opportunity, and where it stacks up versus the other options. Thanks.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

Yeah, good question, Haendel, this is something that we debate internally and with our board as we think about capital allocation sources and uses. If you look at the first part of the year, we've been pretty clear about the fact that we saw highest and best use of capital really in the share repurchase programming. If these discounts continue to proceed, we're not going to be afraid to continue to purchase shares. That being said, Scott is starting to see unique opportunities where maybe going in cap rates are sort of similar or in the same zip code of where we may have a view on where share prices could be trading. It is an ongoing discussion, something that we'll evaluate. It has to be accretive is sort of the simple answer at the end of the day, right?

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

We're not looking to grow for the sake of growing. We certainly want to grow. We're doing a really nice job of harvesting gains off of assets that we don't view as maybe core to our portfolio over a long period of time. We can continue to do some of that in the foreseeable future if needed, I think that we'll just balance it out, in terms of sort of growth opportunities, things Scott's seeing on the development side. We are starting to see some things that could make sense there that can compete with sort of a share repurchase sort of cost of capital. We're also seeing, I think Scott was really smart to say this, it's really early.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

We don't want to say that we're seeing big opportunities in M&A or any of these other sort of scenarios, you're starting to see sellers poke their eyes up from above the 21st Century ROAD to Housing Act and sort of say, "What should I be doing here? Has my cost of capital changed? Are my opportunities for growth a little bit different than maybe they were?" Excuse me, I think Scott's taking some of those calls. Look, I think we'll keep you guys posted. Nothing to talk about yet. My guess is this will drip out pretty slowly throughout the year.

Operator

Thank you. Your next question comes from the line at Austin Wurschmidt with KeyBanc Capital Markets. Please go ahead.

Austin Wurschmidt
Austin Wurschmidt
Analyst at KeyBanc Capital Markets

Yeah, thanks. Jon, Tim, just curious. Lease rate growth is tracking low to mid single digit range for the first half of the year, I think around 2.3%. The start of the year, you were targeting around a mid-single digit growth. Any changes to the composition of same-store revenue growth? If so, just how are you thinking about that balance between occupancy and rate growth?

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Yeah, it's a good question. I would say no real change. We continue to be focused on the trade-off between rate and occupancy. I think what's been really striking to me and something that I feel really good about is I do think that the operations team is striking a better balance between how much occupancy we give up in the course of going out to capture rate. I think the execution continues to improve, and I think it's reflected in kind of the re-acceleration we've seen in renewal rate growth, which has been really strong these last couple of months and, as Tim mentioned, is trending favorably as we look forward to August. We are continuing to focus on making sure we drive to sort of an optimized balance between rate and occupancy.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Recognizing that at this point in the year, the occupancy impact is likely to swamp the impact of blended rate growth. That does not change the fact that we are focused on trying to capture as much rate as is available in the market, while sort of defending occupancy by making thoughtful decisions on how we negotiate on renewals. The good news is, despite kind of striking those trade-offs, we continue to see really strong renewal rent growth, which is obviously the primary driver of revenue growth for us.

Operator

Thank you. Your next question comes from Peter Abramowitz with Deutsche Bank. Please go ahead.

Peter Abramowitz
Peter Abramowitz
Analyst at Deutsche Bank

Yes. Thank you for taking the question. I just wanted to ask about Northern California in general. That area has kind of been on fire from a multifamily standpoint, but it's actually lagging Southern California in your portfolio from a revenue growth standpoint. Just kind of curious, could you talk through trends you're seeing there, how AI tailwinds and job formation are kind of impacting renter dynamics? Is it maybe a different demographic that's causing lower growth there versus some of the multifamily peers?

Tim Lobner
Tim Lobner
COO at Invitation Homes

Hey, great question. Really an important differentiator between us and when, I think, multifamily talk about Bay Area demographics or performance trends. Remember, our Northern California portfolio is largely Sacramento and some of those bedroom communities that sit outside of Sacramento. The Vallejo, some of those sort of burbs that are kind of as you move towards the Bay. We do not have a Bay Area presence. We have a Sacramento presence. Sacramento, I think even for multifamily, behaves very different than, say, Bay Area sort of performance. Our Northern California book is operating as we would sort of expect it, very strong renewals. I would tell you that on the newly side, it tends to be a bit trickier than maybe our Southern California business, but very steady nonetheless. It's a good customer. It's a great book of business.

Tim Lobner
Tim Lobner
COO at Invitation Homes

When we go to sell homes in that part of the country, they sell very quickly. Just please don't confuse that with Bay Area multifamily. They're very different portfolios.

Operator

Thank you. Your next question comes from Adam Kramer with Morgan Stanley. Please go ahead.

Adam Kramer
Adam Kramer
Analyst at Morgan Stanley

Great. Thanks. When you look at some of the softer new lease markets, particularly some of the Florida markets, Phoenix, Texas, are there sort of unifying themes, factors sort of across these markets, sort of driving a little bit of a softer performance relative to maybe the Midwest, right? Is it elevated supply still? Is it consumer uncertainty? Maybe some of the migration stats that you guys walked through earlier. Just sort of wondering if there's a sort of unifying theme across these softer new lease markets.

Tim Lobner
Tim Lobner
COO at Invitation Homes

Yeah. This is Tim. Good question. We track this topic closely, right? Pricing always is a function of supply and demand. On the supply side, the recovery that Dallas talked about, the moderating higher supply levels year-over-year, it hits different markets in different ways. There are certain markets that are recovering faster. We're seeing some really nice supply reduction in markets like Tampa, Orlando, Phoenix. There are other markets that are a bit slower, and the market's not perfectly efficient in terms of how you capture that rent growth as that supply eases, but we are taking advantage of that when we can. The good news is that demand has stayed in really healthy shape this year. If you look at the overall gross number of leads, we're seeing really healthy volume.

Tim Lobner
Tim Lobner
COO at Invitation Homes

If you look at the external funnel, we use Google Analytics, we use Google search terms like houses for lease. That's actually up a hair year-over-year. We know that there's a lot of people that are still looking for single-family rental homes, especially in our markets. One of the things that we're happy about on the internal side is that we're able to convert a lot of these people. We're seeing better conversion rates year-over-year, and I think that's in large part due to two things. One, our teams are, I think, better equipped with technology that we're providing. We're launching right now and have launched in a couple of our markets a new customer relationship management platform. It's allowing us to really provide better service on the front end of the business as people are searching.

Tim Lobner
Tim Lobner
COO at Invitation Homes

We're also making some really nice enhancements to our digital shopping experience, and it's allowing people to self-select, and we're getting higher quality leads that we can work more effectively. We like what we're seeing on the demand side. We like what we're seeing on the supply side. Cautiously optimistic that we continue to see the supply levels moderate over the course of the year. You're going to see variability across markets as it shows up in the form of new lease and renewal lease rent growth. Appreciate the question. We're deadly focused on it.

Operator

Thank you. Your next question comes from Julien Blouin with Goldman Sachs. Please go ahead.

Julien Blouin
Julien Blouin
Analyst at Goldman Sachs

Yeah, thank you. Maybe digging into that last answer a little bit more and specifically looking at your Florida markets, it really looks like from some of the data we look at that the headwind from rental home listings has eased meaningfully over recent months, which I think you referenced, and it does look like market rent growth has started to inflect in your Florida markets. I guess, can you dig into the drivers of that? How much of that is driven by home builders pulling back on deliveries versus how much of it is demand on the for lease or the for sale side starting to clear the available product? How sustainable do you think that sort of rent growth improvement we started to see will end up being?

Tim Lobner
Tim Lobner
COO at Invitation Homes

Look, it's a number of different factors. There's no single driver of it. It's a good question. I think if you look at some of the migration data, we use Oxford Economics as our source, but you look at some of their projections from 2026 and you take it, for example, like a market like Orlando, really nice numbers there. You take a look at Tampa, another market with really nice numbers there projected for 2026. You look at John Burns data that we reference frequently. Most recently, the June numbers continue to validate that build-to-rent deliveries are in the rearview mirror. You look at those factors along with the various components of what constitutes supply in the market. What you'll see in our data shows, it's third-party data showing what are the listings of homes for lease.

Tim Lobner
Tim Lobner
COO at Invitation Homes

We're seeing the mom-and-pop number, again, non-institutional which drove the big buildup in supply over the last, call it, 24 months. That's also where we're seeing the supply easing, if you were to assign or ascribe value to certain cohorts. We're continuing to watch that. We don't have a projection for the future, so I can't tell you exactly where we think supply goes over the next six months. All the drivers of the market or our operating fundamentals are looking pretty strong. We like it. Again, cautiously optimistic as we navigate the back half of the year.

Operator

Thank you. Your next question comes from the line of Jesse Lederman with Zelman & Associates. Please go ahead.

Jesse Lederman
Jesse Lederman
Analyst at Zelman & Associates

Hey, thanks for taking the question. A question here for Scott. Looks like there's only about 100 homes left in the forward purchase pipeline for 2027. I'd love to get your thoughts on maybe discussions you're having with builders, either on forward purchase agreements or what you're seeing on builder takes, and what we should expect in terms of the composition of your external growth moving forward from your various end channels. Also a slight two-parter, slightly related, any timing on self-performance from ResiBuilt? Thanks.

Scott Eisen
Scott Eisen
Chief Investment Officer at Invitation Homes

Sure. Great question, Jesse. Thank you. In terms of what we're seeing from the builders, obviously, you've seen, I think at its peak, our builder backlog on forward purchases was at about 2,700 homes. That's down now to about 300 for what's in the backlog. Again, those are forward purchase commitments that we had done over the last two to three years that have taken time to essentially be delivered where the pace was 10 a month. We obviously haven't made any new commitments year-to-date, which is why that backlog has declined as quickly and meaningfully as it has.

Scott Eisen
Scott Eisen
Chief Investment Officer at Invitation Homes

I think where we're seeing the most interesting opportunity is, we talked about this on our Investor Day in November, where we continue to get monthly takes from the builders on standing inventory of homes that can be delivered in a 60, 90-day timeframe instead of a 12 to 18-month timeframe. We're still seeing opportunities that we talked about previously that are super interesting to us in the, call it, 20% discount, 6% cap rate range. We've not meaningfully leaned into that, but we're starting to see some interesting opportunities that we're evaluating again. I think in terms of that near-term composition, you'll probably more likely see us do short-term acquisitions from builder takes in the short run, as opposed to the long-term forward commitments. We still see forwards.

Scott Eisen
Scott Eisen
Chief Investment Officer at Invitation Homes

I think the valuation and pricing just hasn't been as attractive, and we're more attracted to the short-term builder take stuff. In addition on ResiBuilt, it's now been about six months since the integration. They're out in the market looking for new opportunities for us. As Dallas said earlier, we're evaluating some things as we speak. We're not really ready to talk about where we are in that process, but I think generally speaking, we've seen some great opportunities. Their market presence, as you probably know and we've discussed previously, is in Georgia, North Carolina, and Florida. I think we've seen some interesting opportunities that we're evaluating in the Carolinas and Atlanta.

Scott Eisen
Scott Eisen
Chief Investment Officer at Invitation Homes

When we look at these investments with ResiBuilt, we would be doing them both for ourselves and for our joint venture partners, of which we have two today, and they are in constant dialogue with us on opportunities. We're still looking at opportunities, evaluating it, and we're trying to figure out what makes most sense. Thanks, Jesse.

Operator

Thank you. Your next question comes from the line of Rich Hightower with Barclays. Please go ahead.

Rich Hightower
Rich Hightower
Analyst at Barclays

Hey, good morning, everybody. Thanks for all the details so far. Back to sort of the fallout or the pro forma coming out of ROAD to Housing. You've got a lot of these sort of in-betweener, more than the 350 threshold, but people that don't own tens of thousands of homes along the scale of Invitation and the largest players in the sector. Just broadly speaking, what's your outlook for those in-betweeners in terms of competition, lacking the scale that you do operationally? As it's been referenced, does it eventually become more of a consolidation opportunity in your opinion? Just what are your general thoughts there?

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

Yeah. Rich, Dallas here. Look, generally, we line up with what you said there at the very end. We just believe there'll be sort of an evolution here where you'll see more consolidation. Particularly, I think you'll see a lot more of it around BTR. BTR had sort of a healthy pipeline of new entrants and capital formation kind of going into it pre the ROAD to Housing Act. I think we mentioned it in our remarks. It definitely froze capital. I don't want to give the impression that capital is thawed, but it's starting to poke its eyes up and sort of say, "Okay, how can we participate in this sector? How could we be meaningfully committed to creating new supply?" Which all lines up with our business plan of what we laid out in November at our Investor Day.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

We definitely want to be, if not the largest, the best operator of build-to-rent communities in the country. That's definitely a goal of ours. We now, I think between what we operate and own and in JVs, are probably getting close to almost 100 communities. We have expertise here in a similar way that we're doing it on the scattered site. I think as these smaller operators, these small portfolios, smaller pools of capital are looking for sort of a way to either enhance returns through third-party management or look for an exit partner, I think Invitation Homes could fit that bill nicely. It'll still come down to cost of capital and where we think our cost of capital is. Scott talked about being active with JVs and in partnerships. That's easier for us in this environment right now.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

It requires less out-of-pocket costs, and we make actually a better ROI for our shareholders when you consider the fees and the structures that are in place in those agreements. I think as it relates to the balance sheet, we'll weigh it out relative to share repurchase and other things that we're looking at, the lending business has been really accretive, and we're pleased with what that's doing. It's also a conduit for new activity for the company, both in the build-to-rent space and in the 3PM, sort of, what I would say ecosphere.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

Scott and the team are doing a really good job of just balancing it. I think if there's anything we want people to take away from the call, is that our approach on capital allocation, how we think about growth, the word is balance. Just having really sophisticated balance in how we think about both deploying capital, whether it was through M&A or growth in lending, or in share repurchase. We're just going to be really disciplined capital allocators.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

I think the Street's sort of respected what we've done over the last six, seven, eight months. We've been smart about when to do it and why, and our approach and our conversations both in our management investment committees and with our board will continue to be the same.

Operator

Thank you. Your next question comes from Jade Rahmani with KBW. Please go ahead.

Jason Sabshon
Jason Sabshon
Analyst at KBW

Hi, thanks for taking the question. This is Jason Sabshon in for Jade. Just out of curiosity, how much of the new lease rate growth do you think is seasonal versus improvement in underlying conditions? Because the typical cadence is for there to be an uplift from 1Q to 2Q. Thanks.

Tim Lobner
Tim Lobner
COO at Invitation Homes

Yeah. Hey, great question. Our perspective is that we are seeing improving market conditions. Obviously, we know that there's a degree of seasonality to new lease growth, and we talked about that at investor conferences and on past calls. If you look at the supply data, again, the unique listings in each market of for-lease properties, that number's coming down. Remember, pricing is a direct reflection of supply and demand. Demand remaining healthy, supply coming down. We believe that the fundamentals are actually in our favor right now. Again, we're cautiously optimistic about how the rest of the year proceeds, but again, it is panning out as we expected. As I mentioned earlier, we're liking the setup for 2027.

Operator

Thank you. We do have a follow-up question coming from Ami Probandt with UBS. Please go ahead.

Ami Probandt
Ami Probandt
Analyst at UBS

Hi, thanks for the follow-up. Following the resolution on the ROAD to Housing, do you think that your scatter site infill portfolio becomes relatively more valuable given that it can't really be replicated at this point? If so, does that change your view on capital recycling from those scatter site homes?

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

Look, I think our view on all of the grandfathered assets as it relates to the new legislation obviously have sort of a premium valuation tied to it in the sense that you're an operator operating those assets. I wouldn't say it's absolute in terms of how you think about your asset management strategies, what you want to sell versus what you want to hold, what you want to reinvest in. There certainly is value to it, and I think it's smart to recognize that there are a number of operators that are going to have a grandfathered sort of edge to the portfolios. Look, taking another step back, the bill certainly, in our understanding, allows for growth in a scattered sense, so long as you're doing it with builders going forward, and it's new product or newer product, as it's called in the bill.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

There's still rule making and things like that, but what Scott's doing right now in participating in these communities with a number of both private, regional, and public builders is another way that we'll enhance our scattered footprint. We're huge believers in the scattered footprint thesis in terms of both how it works for the families and the residents that live there. They love being in communities where their neighbors are homeowners and there's stability, and kids are growing up in similar neighborhoods with other families. We also like it from an operational perspective because it's part of our edge. We're really good at operating a scattered site.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

I think both the value of our legacy portfolios we'll look at in the future and how we will design our aggregation of capital and how we will invest capital in the foreseeable future, scattered will be a large part of it.

Operator

Thank you. Our last question comes from Brad Heffern with RBC. Please go ahead.

Brad Heffern
Brad Heffern
Analyst at RBC

Hey. Yeah, thanks. Appreciate the follow-up. Can you talk about on ResiBuilt, what sort of NOI we can expect that to generate? Looks like it was about $12 million in the first half. I'm sure it'll bounce around just given the nature of the business, but is that a good run rate or is there a different way we should think about it as it potentially transitions to more development specifically for Invitation?

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Yeah, it's a good question. I think it's a little early to answer. As I mentioned earlier in some of my Q&A responses, the disruption in the market, sort of the chilling effect on capital formation that we saw for about five of the first six months of the year is going to cause us to have to overcome a little bit of a gap in terms of what we expected to come off ResiBuilt. As we look to the future, look, to be clear, we view that as a strategic acquisition that provides us a lever to continue to grow via a channel and a capability that we didn't possess previously. I'm not prepared to say what I think the earnings contribution may be over time. I would say that we are really excited about what we're seeing.

Jon Olsen
Jon Olsen
CFO at Invitation Homes

Fee building is going to continue to be a big part of our strategy going forward. That is a very accretive, profitable business, and the ResiBuilt team is exceptionally good at that. As Dallas mentioned earlier, we are looking at more opportunities. Scott's seeing more things with the ResiBuilt team that may eventually make sense to do either on balance sheet or with joint venture partners. Our expectation is that this is going to be a growth engine for our business over time and distance.

Operator

Thank you. That concludes our question and answer session. I would like to hand it back to the President and CEO, Dallas Tanner, for closing remarks.

Dallas Tanner
Dallas Tanner
President and CEO at Invitation Homes

We want to thank everyone for participating today. We look forward to seeing everybody this fall. Thank you.

Operator

Thank you, presenters. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.

Executives
    • Scott McLaughlin
      Scott McLaughlin
      SVP of Investor Relations
    • Dallas Tanner
      Dallas Tanner
      President and CEO
    • Tim Lobner
      Tim Lobner
      COO
    • Jon Olsen
      Jon Olsen
      CFO
    • Scott Eisen
      Scott Eisen
      Chief Investment Officer
Analysts
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