House hunters don’t need to be told that property is too expensive right now. But Wall Street has an idea by just how much.
The stock market is pricing portfolios of American homes at a hefty discount to what houses are changing hands for in the open market. Shares of single-family landlords Invitation Homes INVH 0.91%increase; green up pointing triangle and American Homes 4 Rent AMH 0.27%increase; green up pointing triangle are trading at 35% and 20% discounts to their net asset values, respectively, according to real-estate analytics firm Green Street. Invitation Homes’ stock has traded at a particularly large discount to NAV since interest rates began to rise in early 2022, but the gap has widened by 10 percentage points in the past year.