管理層發言
Welcome to the Invitation Homes Second Quarter 2026 Earnings Conference Call. All participants are in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key. 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.
Thank you, operator, and good morning. Joining me today from Invitation Homes are Dallas Tanner, our President and Chief Executive Officer; Timothy J. Lobner, our Chief Operating Officer; Jonathan S. Olsen, our Chief Financial Officer; and Scott G. Eisen, our Chief Investment Officer. Following our prepared remarks, we will 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.
We described 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 we 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 will turn the call over to Dallas Tanner. Go ahead, Dallas.
Thanks, Scott, and good morning, everyone. It has 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 have 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%. Timothy and John will get into the details. It is a great foundation heading into the second half of the year. I will 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. Among other things, the act includes some meaningful provisions aimed at speeding up and encouraging new construction. That is a goal we fully support, since we have long known that better housing affordability is achieved by increasing new supply.
In fact, that has been precisely our approach at Invitation Homes—growing through new construction and homebuilder partnerships. We are 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 to help them build credit simply by paying their rent on time. For policymakers, it means staying closely engaged with Treasury and HUD and others as this new regulatory guidance takes further shape. Beyond the legislative backdrop, demand for our homes remains healthy. According to the latest data from John Burns, on average, it is 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 that, 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. Share 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 repurchases since December at an average price of a little over $26 per share. 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 because of the legislative uncertainty. But with the ROAD to Housing Act now settled, more sellers are coming to market, including some attractive smaller portfolios.
It is 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 reaccelerated 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. As a reminder, these loans typically yield in the high single digits and give us the opportunity to purchase the community once it is built. Zooming out, at our Investor Day last November, we talked about building the best-run single-family rental platform in the country that is disciplined on cost and capital and 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 and redeploying that capital into accretive opportunities.
Second, growth: supporting our platform through the acquisition of ResiBuilt and the expansion of our construction lending business. And third, resident satisfaction: reflected in the renewal and retention numbers Timothy will walk through shortly. In short, we are doing exactly what we said we were going to do. Combined with what Timothy and John are about to cover, our first half performance gave us confidence to raise our full-year guidance. I will let John cover the specifics here. But 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 accretively creates value for our shareholders. Timothy, over to you.
Thanks, Dallas, and good morning, everyone. I will start with the headline: new lease rate growth accelerated every month from January to June, capping off peak leasing season on a high note. Our second quarter same store renewal rent growth was approximately 3.7% for renewals, and blended lease rate growth for the quarter was 2.7%. Average length of stay for our residents remained over 40 months. These data points reflect a high level of resident satisfaction with both our homes and our service. Turning now to our second quarter same store results, NOI growth was 1.5% year-over-year, driven by 1.6% core revenue growth and partially offset by core operating expense growth of just 1.9%. I will touch on a few more details behind each of those items. On the revenue side, renewal rent growth rose through the quarter. It rose from just over 3% in April and May to 3.7% in June, averaging 3.3% for the second quarter.
Second quarter new lease rent growth was 1.1%, which 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 is a really good reflection of how our teams are running the business. Fixed costs, including property taxes and insurance, increased by only 3.5% year-over-year. We are 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, and while single-family rental listings remain elevated, the pace of new supply growth has slowed sharply since the start of this year.
In addition, according to John Burns, markets that were the most oversupplied are now seeing the sharpest drops in unsold inventory of new homes. There is still a bit of supply to work through in some markets, but the trend has clearly been moving in the right direction. We will 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 June, before easing, as we would expect for late summer, to 1.2% in July. 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 was 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, healthy demand, and an 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. John, I will hand it over to you.
Thanks, Timothy. Today, I will 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 homebuilder 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. Our acquisitions guidance remains unchanged, with midpoints of $250 million for wholly owned homes from our homebuilder 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 have 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 is 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 31 to $280 million as of June 30. As a result, 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 to 6.0x 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; 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 30 and matures next summer. Because the offering and prepayment both occurred in July, their impact is not reflected in our June 30 financial statements or supplemental schedules. We have 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 for the quarter, with midpoints up a penny 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. Operator, please open the line for questions.
分析師問答
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 *1 on your telephone keypad. And if you would like to withdraw your question, please press the # key. 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.
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 price from a cap rate and unlevered IRR perspective? Assuming you take part in any of these deals, how would you fund them?
Thanks for the question. This is Scott. In terms of the current market, we are not seeing any large transactions at this point. We have probably seen some smaller portfolios in the sub-$100 million, maybe slightly above the $100 million size range. I think it is too early to really talk about price guidance and returns on them because we really have not seen a lot of transaction activity. Post-ROAD to Housing Act, the first six months of the year were really quiet as people waited to see where the legislation turned out. Now that the act has passed, I think we are seeing some capital start to open up again and start to test the waters. So it is really too soon to say exactly where we think transactions are going to price, but activity has picked up since the legislation was passed.
And your next question comes from the line of Jamie Feldman with Wells Fargo. Please go ahead.
Hi. Thank you. You have Connor on for Jamie. Could you provide an update on July new, renewal, and blended lease rate growth? And as we think about the second half of this year, what are you assuming for those metrics, especially with the seasonal moderation in new lease, particularly given the easier comps and more first-half-weighted expiration schedule?
Hey, Connor. Great question. As discussed in our prepared remarks, July renewals were at 4.3%, which is an acceleration out of our Q2 number of 3.3%. On the new lease side, we were at 1.2% in July, coming off 1.8% in June. We saw a nice acceleration through Q2 and then a moderation in July, which is typical for seasonality. On the blended side, July was 3.4%. As you think about the back half of the year, there is a regular cadence to how the industry moves. Occupancy informs how we approach lease rate: occupancy typically grows through peak season and then moderates as many households move during the summer, and then picks up again toward year-end. The blend is primarily a function of renewals—roughly 75%—and new leases—about 25%. New lease growth started negative in Q1, picked up through the year, and plateaued in June; we expect it to moderate through the balance of the year. Renewals are the most consistent part of our business; over a typical year they vary between about 3.5% to 4.5%. That is important because renewals make up 75% to 80% of our book. For August, renewals are shaping up similarly to July. We are pleased with how the portfolio is performing and how our teams are executing.
Your next question comes from the line of Steve Sakwa with Evercore ISI. Please go ahead.
Yeah. Thanks. I appreciate all the comments on the revenue side. Maybe just touching on expenses, which I think moderated a bit from Q1 to Q2. What are some of the puts and takes as you look at the back half of the year? And if you think about your overall 2026 number and we sort of start to think about next year, what are the puts and takes we should be thinking about for next year's expense growth?
Yes, Steve. I think the biggest variable is property tax. We have probably three to four weeks before we start to get preliminary views on value, and then maybe another 30 to 45 days before we start getting actual bills in the door. That is always a big consideration. What is striking to me is how effective the focus on cost controls around the controllable side has been: the team has made thoughtful decisions about how they approach the service side, and total turn costs are looking quite favorable. So as I think about puts and takes, property tax is the primary question mark. Vis-à-vis the rest of the expense line items, we are really happy with what we are seeing, while recognizing there is still a good bit of the year left to go.
Your next question comes from Jana Galan with Bank of America. Please go ahead.
John, 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?
I would point out a couple of things. First, we have half a year to go, and the second half presents potentially a higher degree of execution risk because turnover typically ticks up a bit in this season. The quantum of homes we are taking back that we need to turn and re-lease is something we will be really focused on as we defend occupancy in the second half. Higher turnover can impact both the revenue and expense sides of the P&L, and any turnover creates execution risk given that the supply backdrop, while improving, remains elevated. Second, property taxes are still largely unknown at this point; as a reminder, our three largest states by property tax are California, Georgia, and Florida—those three states are about 70% of a line item that represents about 55% of our total OpEx—so that will be a consideration. Lastly, given the disruption some of the earlier versions of the ROAD to Housing Act caused, we do expect the contribution from ResiBuilt to 2026 earnings to come in a bit behind our original expectations.
Projects that were in flight continued, but a number of projects that were scheduled to start in the first half were delayed or canceled. The team is doing a great job refilling that pipeline now that the uncertainty has been removed, but it remains to be seen how much of that benefit can be recouped in the second half of 2026 versus rolling into 2027. Overall, our guidance reflects cautious optimism while acknowledging unknowns and execution risks with a decent chunk of the year to go.
Your next question comes from Buck Horne with Raymond James. Please go ahead.
Hey. Thanks. Good morning. Congrats, guys. Just got a question from a higher level. One of your multifamily peers highlighted that quarter-over-quarter they saw a big in-migration of new leases coming from out of-market. I was wondering if you have detected or tracked anything similar in terms of new lease demand migrating into some of your Sunbelt markets from out-of-market?
This is Dallas. We survey move-ins and move-outs. In our second quarter surveys, roughly 85% of our move-ins were in-state move-ins based on that survey data, so we are not seeing any major dislocation or a wave of out-of-state move-ins. Typically about 50% of move-ins are city-to-city within a state, where people are trying out a new area and want to be close to job corridors and transportation. We have not seen anything dramatic in terms of net migration shifts.
I would add that third-party data also shows a positive story: roughly 65% to 70% of our markets are projected to have favorable net migration, and those are primarily Sunbelt markets, which is favorable for the long-term prospects of our portfolio.
Your next question comes from Ami Probandt with UBS. Please go ahead.
Hi. Thanks. Other core revenue declined in the quarter after being up over 10% last quarter. What are the moving pieces within this line item? And how do you expect it to trend for the remainder of the year?
It is 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 expect to continue to see strong growth from that line item for the rest of the year.
And the next question comes from Brad Heffern with RBC. Please go ahead.
Hey, everybody. Just a follow-up on the blends. You almost always see the third quarter lower than the second quarter given new lease pricing falls off. This year, the July blends are up. It sounds like renewals will continue to be strong and above second quarter levels. Should we expect blends to buck the normal seasonal trend and increase in the third quarter?
We generally do not give too much of our forward projection before it happens, but as I mentioned earlier, renewal numbers we are seeing in August look much like July, and we are pleased with that strength. Typically, blended rates do come down in the fourth quarter as a function of filling the portfolio, but the market is finding its footing and the year's shaping up as we expected. We like how it sets us up for 2027.
And the next question comes from John Pawlowski with Green Street. Please go ahead.
John, can you speak to the third-party management business as well as construction lending? Are those business lines and their contribution to earnings trending better or worse than you expected? Any color on the drivers would be appreciated.
Those lines are generally trending in line with our expectations. Year-to-date, third-party property management fee income is about $4 million lower, driven primarily by the sale of a number of homes on behalf of Starwood, which reduced our average home count, and because we had about $2.8 million of nonrecurring disposition fees in 2025 that are not repeating. As far as the lending business goes, we are pleased with how that is going: activity got quiet while the ROAD to Housing Act was underway, but since clarity was realized, we are seeing more inbound interest. The team continues to originate what we think are interesting deals on real estate where we have a high degree of conviction, so it remains a compelling growth area and we are a little ahead of where we thought we would be at this point in the year considering the six months of dislocation.
I would add that the program is going according to plan. Based on what is either closed or under commitment right now, it is approximately $350 million in loans. First principles remain unchanged: we want strong sponsors doing build-to-rent development and communities where we have boots on the ground and local market knowledge, and communities that we could potentially purchase upon stabilization. Nothing has changed in the program design or buy box. We are being measured in our pace and will do the right loans with the right counterparties when the time is right. We are on track and pleased with the program.
Your next question comes from Haendel St. Juste with Mizuho Securities. Please go ahead.
Hey, guys. Good morning, and thanks for taking the question. Going back to Eric's earlier question about portfolios, I know you are not seeing any larger portfolios out there today, but how are you weighing those opportunities 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 was in the low- to mid-5s. Curious overall how you are assessing the opportunity and where it stacks up versus other options.
Good question, Haendel. This is something we debate internally and with our board as we think about capital allocation. In the first part of the year, highest and best use of capital was clearly share repurchases given the discounts. If those discounts continue, we will continue to purchase shares. That said, Scott is starting to see unique opportunities where going-in cap rates could be in a similar neighborhood to what we view as the implied asset value relative to share prices. It is an ongoing discussion and any deal has to be accretive. We are not looking to grow for growth's sake. We are harvesting gains off assets we do not view as core and redeploying capital accretively. We will balance between share repurchase, acquisitions from builder tapes, development, and lending. It is early, and we will evaluate opportunities as they arise.
Your next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Please go ahead.
John, Timothy, just curious: lease rate growth is tracking low- to mid-single-digit in the first half of the year. At the start of the year you were targeting mid-single-digit growth. Any changes to the composition of same store revenue growth, and how are you thinking about the balance between occupancy and rate growth?
No real change. We continue to focus on the trade-off between rate and occupancy. What has been striking is the operations team's improved balance between the occupancy we give up to capture rate. Execution continues to improve and that shows up in the reacceleration in rental rate growth we've seen recently. We are focused on capturing as much rate as is available while defending occupancy through thoughtful renewal negotiations. The good news is renewal rent growth remains strong, and renewals are the primary driver of our revenue.
Your next question comes from Peter Abramowitz with Deutsche Bank. Please go ahead.
Thank you. I wanted to ask about Northern California generally. It has been strong from a multifamily standpoint, but it is lagging Southern California and airport portfolio from a revenue growth standpoint. Could you talk through trends you are seeing there? How are AI tailwinds and job formation impacting renter dynamics? Is it a different demographic causing lower growth there versus some multifamily peers?
Great question. An important differentiator is that our Northern California portfolio is largely Sacramento and surrounding bedroom communities—Vallejo and similar suburbs—not the Bay Area. Sacramento behaves very differently than the Bay Area. Our Northern California book is operating as expected with very strong renewals. On the new lease side it tends to be a bit trickier than Southern California, but it is steady. When we go to sell homes in that part of the country they sell very quickly. Please don't conflate our Sacramento-focused presence with Bay Area multifamily—it is a very different portfolio.
Your next question comes from Adam Kramer with Morgan Stanley. Please go ahead.
Thanks. When you look at some of the softer new lease markets—Florida, Phoenix, Texas—are there unifying themes across these markets driving softer new lease performance versus the Midwest? Is it elevated supply, consumer uncertainty, migration stats? What is the defining theme across these softer new lease markets?
Good question. Pricing is always a function of supply and demand. The recovery in supply that Dallas referenced—moderating higher supply levels—impacts markets differently. Some markets are recovering faster; we are seeing good supply reduction in markets like Tampa, Orlando, and Phoenix. Others are slower. Demand has stayed healthy this year by most measures: gross leads are healthy, external funnel metrics like Google searches for houses for lease are up slightly year-over-year. We are converting better on leads due to improved technology and a new CRM platform being rolled out in several markets, and enhancements to the digital shopping experience that produce higher-quality leads. So demand is strong and supply is moderating, but you'll see variability across markets. We remain cautiously optimistic as we navigate the back half of the year.
Your next question comes from Julien Blouin with Goldman Sachs. Please go ahead.
Thank you. Digging into Florida markets, it looks like the headwind from rental home listings has eased meaningfully over recent months and market rent growth has started to inflect. Can you dig into the drivers of that? How much is driven by homebuilders pulling back on deliveries versus demand clearing available product, and how sustainable do you think the rent growth improvement is?
There is no single driver. It is a number of factors. Migration data from sources like Oxford Economics shows positive projections for markets like Orlando and Tampa. John Burns' data shows build-to-rent deliveries are in the rearview mirror. We also track third-party listings of homes for lease and are seeing mom-and-pop non-institutional supply easing—the cohort that drove much of the supply buildup over the last 24 months. We will continue to watch carefully. We do not have a precise projection for the next six months, but overall drivers and operating fundamentals look solid and we are cautiously optimistic.
Your next question comes from the line of Jesse Lederman with Zelman and Associates. Please go ahead.
Hey. Thanks for taking the question. Question for Scott: it looks like there is only about 100 homes left in the forward purchase pipeline for 2027. I would love your thoughts on discussions with builders, either on forward purchase agreements or what you are seeing on builder tapes and what to expect in terms of the composition of external growth from your various channels. Also, any timing on self-performance from ResiBuilt?
Great question, Jesse. At our peak, our builder backlog on forward purchases was about 2,700 homes; that is down now to about 300 in the backlog due to lack of new commitments year-to-date. We are seeing opportunities in standing inventory from builders that can be delivered in a 60- to 90-day time frame rather than 12 to 18 months. Those short-term opportunities are interesting to us, potentially in the mid-to-high single-digit cap rate range, and we are evaluating some of those again. In the near term, you will probably see us do more short-term acquisitions from builder tapes rather than long-term forward commitments. As for ResiBuilt, it has been about six months since integration. They are out in the market looking for new opportunities. Their market presence is in Georgia, North Carolina, and Florida. We have seen interesting opportunities we are evaluating, particularly in the Carolinas and Atlanta. For ResiBuilt-related investments, we would pursue them both for ourselves and with our joint venture partners; we have two JVs today and are in constant dialogue with them. We are evaluating and looking for what makes the most sense.
Your next question comes from Richard Hightower with Barclays. Please go ahead.
Hey. Good morning. Thanks for all the details so far. Regarding the fallout or the pro forma coming out of the ROAD to Housing Act, you have many of these in-between owners that do not own tens of thousands of homes like the largest players. Broadly speaking, what is your outlook for those in-betweeners in terms of competition? Lacking the scale that you have operationally, does this eventually become more of a consolidation opportunity?
Richard, we agree there will likely be an evolution toward consolidation, especially around build-to-rent. Build-to-rent had healthy capital formation before the ROAD to Housing Act. The act froze some capital, but capital is beginning to poke its head up and consider participation in the sector. We want to be the best operator of build-to-rent communities in the country and already operate and own, in JVs, close to 100 communities with expertise similar to our scattered-site platform. Smaller operators and capital pools may look for exit partners or third-party management arrangements, and Invitation Homes could fit that role if the economics are right. It will come down to cost of capital and where we see better ROI versus share repurchases. The lending business is accretive and serves as a conduit for new activity in build-to-rent and third-party property management. Our approach to capital allocation will remain balanced and disciplined.
Your next question comes from Jade Rahmani with KBW. Please go ahead.
Hi. Thanks for taking the question. This is Jason Sabshon on for Jade. How much of the new lease rate growth do you think is seasonal versus improvement in underlying conditions? There is an uplift from Q1 to Q2 typically; how much of this year's improvement is structural?
Great question. There is seasonality to new lease growth—Q2 is typically stronger—but we believe fundamentals are improving. Supply measures, particularly unique listings of for-lease properties in each market, are coming down, and demand remains healthy. Pricing is a direct reflection of supply and demand, so we view the improvement as supported by fundamentals rather than solely seasonality. We remain cautiously optimistic about the rest of the year.
We do have a follow-up question coming from Ami Probandt with UBS. Please go ahead.
Hi. Thanks for the follow-up. Following the resolution on the ROAD to Housing Act, do you think your scattered-site infill portfolio becomes relatively more valuable since it cannot really be replicated at this point? If so, does that change your view on capital recycling from those scattered-site homes?
We view grandfathered assets as having a premium tied to the new legislation, but that does not automatically change our asset management or capital recycling strategy. There is certainly value to such assets and some operators will have a grandfathered edge. The bill allows for growth in a scattered sense when done with builders and new product, subject to rulemaking. Participating in build-to-rent communities with private, regional, and public builders is another way to enhance our scattered footprint. We are strong believers in the scattered-site thesis: residents like living in neighborhoods where neighbors are homeowners, and operationally it is an edge for us. Scattered-site homes will remain a large part of our investment approach and we will evaluate future sales or holds within that context.
Our last question comes from Brad Heffern with RBC. Please go ahead.
Hey. Thanks. On ResiBuilt, what sort of NOI should we expect? It looks like it was about $12 million in the half. Is that a good run rate, or is there a different way to think about it as it transitions to more development specifically for Invitation Homes?
That is a good question. It is a bit early to give a definitive run rate. The disruption earlier in the year caused a chilling effect on capital formation that will cause us to overcome a gap in what we expected from ResiBuilt in 2026. We view ResiBuilt as a strategic acquisition that provides a growth channel and capability we did not previously have. Fee-building will continue to be an important, accretive, and profitable part of our strategy. The ResiBuilt team is strong and we're seeing opportunities that may make sense to do on balance sheet or with joint venture partners. We expect ResiBuilt to be a growth engine over time, but it is too early to provide a precise long-term NOI projection.
And that concludes the question-and-answer session. I would like to hand it back to the President and CEO, Dallas Tanner, for closing remarks.
We want to thank everyone for participating today. We look forward to seeing everybody this fall. Thank you.
Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.