Q1 2026 Earnings Call Transcript

Welcome to the Invitation Homes Inc. First Quarter 2026 Earnings Conference Call. All participants are in listen-only mode at this time. 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 Inc. are Dallas Tanner, our President and Chief Executive Officer; Tim Lobner, our Chief Operating Officer; Jonathan S. Olsen, our Chief Financial Officer; and Scott 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 first 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 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 nonhistorical statements, which are subject to risks and uncertainties that could cause actual outcomes or results to differ materially from those indicated.

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 will now turn the call over to Dallas Tanner.

Thank you, Scott. Good morning, everyone, and thanks for joining us. I want to start by thanking our associates for another quarter of strong execution in a dynamic environment, and our residents for continuing to choose Invitation Homes Inc. We delivered first quarter results in line with our expectations, accelerated average occupancy to the mid-96% range, and entered April with improving leasing momentum.

I will let Tim walk through the details, but this positions us really well in the early part of the peak leasing season. We are in the business of providing high-quality, professionally managed homes in neighborhoods where families want to live, and the value proposition for our residents has never been clearer. In our markets, leasing one of our homes saves residents on average almost $1 thousand per month compared to owning, according to data from John Burns. That is not a temporary dislocation.

It reflects higher mortgage rates, increased home prices, and the structural cost of homeownership. For millions of American families, leasing a single-family home is simply the most financially responsible housing choice. We are proud to be part of that solution, and we take that responsibility seriously. In recent months, I have spent a lot of time working with other industry leaders in Washington, D.C., to advocate on behalf of our industry and our residents.

I have met frequently with policymakers, the White House, Treasury, and Capitol Hill on both sides of the aisle. Everyone is focused on the same objective of making housing more affordable in this country, and I am encouraged by the constructive dialogue and that we are moving in the right direction for our industry and the residents we serve. This responsibility shows up in everything we do. We maintain and improve almost 110 thousand homes across 16 core markets.

We create new housing supply through development and strategic partnerships. And we provide residents the flexibility, space, and access to school districts they want without the financial burdens of homeownership. For our residents, these are intentional housing choices, not stopgaps, and that is reflected in our strong retention rates and the length of time our residents choose to stay. Those resident behaviors underpin the resilience of our business.

During periods of uncertainty, we tend to see residents stay longer, occupancy remain stable, and cash flows hold up really well. In the first quarter, our same store average resident tenure was over 40 months, with resident renewals remaining very high at over 78%. That resilience gives us flexibility in how we think about allocating capital. While the share price has not been where we want it to be, we have been deliberate about addressing that.

During the quarter, we completed the full $500 million share repurchase authorization approved by our Board last October, including $400 million of buybacks since our February earnings call. Our Board has also just approved a new $500 million repurchase authorization, and we will continue to evaluate the best uses of capital as conditions evolve. We also continue to support and advance our third-party homebuilder partnerships. Our forward pipeline today stands at just over $200 million, reduced roughly two-thirds from where it was a year ago.

We value these relationships because they serve a dual purpose: they generate attractive risk-adjusted returns for our shareholders and they contribute new housing supply to the markets where we operate. Meanwhile, the ResiBuilt acquisition we closed in January has moved quickly from integration to production, delivering over 300 homes to third-party buyers during the quarter. Our plan remains to continue using ResiBuilt primarily as a fee builder as we evaluate the right pace of building for ourselves. In addition, our construction lending business has grown to $279 million of commitments as of today, generating attractive returns.

To date, we have funded just under $20 million against those lending commitments, and we expect that number to grow through 2026 as the development progresses. Together, ResiBuilt and construction lending represent a differentiated and capital-efficient way of bringing new housing supply to the markets. Looking ahead, we feel good about where we stand. Occupancy is climbing as we enter peak leasing season, new lease rent growth turned positive in April, and we have a clear view of where our capital can create the most value.

The thesis is really straightforward: durable demand, disciplined operations, and capital allocation that rewards shareholders. We are executing on all three. At our November Investor Day, I laid out exactly what this management team is focused on—running the best-operated single-family rental company in the country—and I am confident we are moving in the right direction. With that, I will turn it over to Tim.

Thanks, Dallas, and good morning, everyone. In my prepared remarks today, I will walk through our first quarter operating results, provide some context on the year-over-year comparisons, and then share our preliminary April leasing trends. But first, I want to thank our teams in the field for their continued dedication and our residents for choosing Invitation Homes Inc. Starting with the headline numbers, same store core revenue grew 1.6% year-over-year.

Core operating expenses grew 5.7%, and same store NOI was down 0.3%. Regarding revenue, renewal rent growth was a healthy 3.7%, while new lease rent growth was negative 3%, resulting in a blended rent growth of 1.6%. New lease rent growth reflected elevated supply conditions that continued to weigh on pricing in a number of our markets during the quarter. The good news is that our West Coast and Midwest markets all held positive new lease rent growth, and as I will discuss in a moment, the picture improved considerably in April.

Same store occupancy averaged 96.3% for the quarter. While that is a strong result relative to historic norms, it reflects a normalization from the 97.2% occupancy we achieved in 2025. That 90-basis-point year-over-year reduction created a comparable headwind to our same store revenue growth this quarter. We talked about this normalization during the last few quarters, and it has played out right where we expected and where we want to be as we head deeper into peak leasing season. Encouragingly, occupancy improved every month this year, moving from 96% at the start of the year to 97% by quarter end.

Meanwhile, bad debt remained low and stable during the first quarter at 60 basis points, flat with a year ago, which speaks to the financial health of our resident base. That financial health shows up in other ways too. To date, over 160 thousand residents have joined our no-cost positive credit reporting program through Isuzu, with the majority improving their average credit score by nearly 50 points since enrolling. Turning now to first quarter same store expenses, the 5.7% year-over-year growth looks elevated relative to our full-year guidance, and the reason is straightforward.

As you will recall, 2025 expenses were unusually low due to a combination of factors, including abnormally mild weather that suppressed R&M costs and exceptionally low turnover. These factors created a tough year-over-year comparison. We expect the year-over-year expense comparisons to normalize as we move through the year, and our full-year expense guidance of 3% to 4% remains intact. On the broader supply picture, third-party data tracking single-family for-lease listings across our key markets reflects continued moderation to date this year.

While listings are still elevated year-over-year, the level has notably improved in recent months, which is consistent with what we are beginning to see in our own leasing activity. Which brings me to April, where the preliminary trends are encouraging. Average occupancy accelerated to 97.1%, up 80 basis points from first quarter. Renewal rent growth was in the low 3% range, and new lease rent growth returned to positive territory at just under 0.5%, or a 230-basis-point acceleration from March.

Together, this brought April blended rent growth to 2.3%. In summary, we came into this year knowing the first quarter comparisons would be challenging, and our teams executed well through them. Occupancy is climbing, new lease rent growth has turned positive, and the majority of peak leasing season is in front of us. We feel good about where we stand.

With that, I will turn it over to John.

Thanks, Tim. Today, I will start with our earnings results, then cover capital allocation, the balance sheet, and guidance. For the first quarter, core FFO per share was generally flat year-over-year, and AFFO per share was down 2.6%, consistent with our expectations. As Tim noted, 2025 was an exceptionally strong quarter.

Occupancy was at a post-pandemic high, expense growth was notably low, and recurring capital expenditures came in below trend. While our performance was solid, our per-share metrics this quarter reflect that difficult comparison, as anticipated. Additionally, I would note that the weighted average share count used in our per-share metrics for this quarter does not yet fully reflect the denominator impact of our robust share repurchase activity. Turning to capital allocation, as Dallas mentioned, we had an active quarter.

We have achieved very strong traction with our disposition strategy. In Q1, we sold 483 wholly owned homes for $206 million, well ahead of our expectations. Sales prices and days on market continue to beat our underwriting, and we are achieving pro forma stabilized cap rates in the low 4s. This strong momentum on dispositions enabled us to lean in confidently on share repurchase.

In Q1, we repurchased approximately 17 million shares for roughly $439 million. Combined with share repurchases completed in 2025, we have fully utilized the $500 million authorization our Board approved last October, retiring a total of over 19 million shares at an average price of $25.86. To put that in context, during the first quarter our average sale price was $427 thousand per home, and we bought back our stock at an implied price of $270 thousand per home. With the original $500 million share repurchase authorization now fully complete, our Board has approved a new $500 million repurchase authorization so that we may continue to have that tool in our toolkit.

As always, we remain disciplined capital allocators, balancing liquidity and conservative balance sheet management with the opportunity to create value for our shareholders across the many levers available to us, including share repurchases. Moving now to our balance sheet, which remains in excellent shape. At quarter end, we had $1.3 billion in available liquidity through unrestricted cash and undrawn revolver capacity, while total indebtedness stood at approximately $8.9 billion, with no debt reaching final maturity before June 2027. Our net debt to adjusted EBITDA ratio was 5.6 times, well within our long-term target range of 5.5 to 6 times.

That leverage profile, combined with 89.5% of our debt being fixed-rate or swapped to fixed-rate and approximately 90% of our wholly owned homes unencumbered, leaves us well positioned to navigate the current environment. Turning now to guidance, we are maintaining the full-year outlook we provided in February. As I mentioned earlier, disposition volume is tracking ahead of our initial expectations, which accelerated our stock buyback pace, and our insurance renewal came in favorable relative to our assumptions. We view these as encouraging early reads, and we expect to have more to say once the majority of peak leasing season is behind us.

In closing, the balance sheet is strong, the business is operating as expected, and we have the financial flexibility to keep doing what we said we would do—return capital to shareholders at these prices while maintaining the operational discipline that has defined how we manage this company. Operator, we are ready to begin the question and answer session.

We will now open the call for questions. To ask a question, please press star then 1 on your telephone keypad. To withdraw your question, please press star then 1 again. If you are using a speakerphone, please pick up your handset before pressing the keys.

In the interest of time, we ask that participants limit themselves to one question and then requeue by pressing star then 1 to ask a follow-up question. One moment, while we poll for questions. The first question comes from the line of an Analyst with Bank of America. Your line is open.

Thank you. Good morning, and congrats on the nice start to the year. Just a question on the renewals—where you are sending them out for spring and summer, and what kind of strategy you are using there during this leasing season?

Hi. I appreciate your question. We generally do not provide details on what we are going out at for renewals. We are seeing a strong market out there.

We believe that May will look a lot like April, and if you think about our general renewal rate trends throughout the year, there is not a whole lot of seasonality. There is a little bit of it, but generally you see that mid-3% to mid-4% rate growth throughout the year. It is nice to see a good acceleration in our new lease rent growth, so we believe we are on track. We are liking the fundamentals that we are seeing out there right now.

Next question comes from the line of Jamie Feldman with Wells Fargo.

Thank you. There is a pretty meaningful spread between your renewal rate growth and your new lease rate growth in some of the heavier construction markets, some of the Sunbelt markets. Can you talk about whether you think that narrows over time, or as we continue to see more supply, do you think that new lease growth will remain much more pressured than renewal?

Thanks, Jamie. This is one that comes up from time to time. Look, spreads generally speaking tend to narrow as we work through our peak season. You see the renewal rates tend to stay flat, as I answered in the previous question, whereas the new lease growth generally trends upward from Q1 towards the end of Q2 and essentially closes the gap.

There are some markets, to your point, where there is a little bit of outsized year-over-year growth pressure. There are a number of contributing factors. Build-to-rent is one of them, but if you look at the data provided by outside folks that track build-to-rent deliveries, we feel good about peak deliveries being in the past and that volume or inventory starting to come down. We have also seen over the last two years the mom-and-pop inventory has grown, but we are seeing that moderate really nicely as well.

Each market is a little different, but we are starting to see some moderation in some of our larger markets. One thing on the supply side I will point out is that the year-over-year number at the start of the first quarter was large; we know it is up year-over-year and there are a lot of ways of tracking it. But we have seen that number moderate over the course of Q1, so that year-over-year number is actually much smaller than it was in January. We really like the fundamentals right now that we are seeing, and we hope to continue to see that absorption of product across the markets as peak season continues.

Next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Your line is open.

Good morning. Maybe, Tim, going back to that last comment around inventory. You have seen occupancy improve pretty significantly in recent months, but last year that seasonal ramp seemed to peak a bit early. Based on leading indicators you are seeing and maybe what is assumed in guidance, do you expect things will drop off similarly, or was last year more of an anomaly?

And given your comment about inventory improving a bit, does it feel a little bit better this year?

Great question. We are cautiously optimistic as we head deeper into peak leasing season. No year is the same as the prior year. What gives us confidence is what we are seeing on the demand side.

Demand in Q1 was generally quite healthy. Although it is down from peak pandemic-era demand, what we saw in our external funnel—what we saw in Google search, people asking about homes for rent—was up slightly year-over-year. So that demand for single-family residences is there. On our internal funnel, we are seeing a really stable top-of-funnel.

Our gross lead volume was actually up year-over-year. Obviously, it is spread across a bigger denominator in terms of inventory, but it really shows health in the demand side. We are seeing a nice conversion on our leads to showing in our portfolio. I would also point to the net migration that we see towards the Sunbelt.

We look at Oxford Economics data and continue to see nice numbers, although down from the peak pandemic numbers, certainly still strong in DFW, Phoenix, Charlotte, and Orlando. Those are all strong migratory patterns. We feel good about where we are. Typically you see growth in occupancy as you head deeper into peak season, then after the effective move-outs when peak season ends, you see occupancy go down a little bit toward the back of the year, and in December you see it pop back up as we head into the new year for the new cycle.

Again, we are pretty happy with the fundamentals we are seeing—cautiously optimistic at this point.

Next question comes from the line of Steve Sakwa with Evercore ISI. Your line is open.

Thanks. Good morning. Given the activity you have had on the disposition program, is that something you would consider ramping? What are the tax implications around that, and if you were to ramp that up, might that entail something like a special dividend as opposed to buybacks? The sales environment seems pretty good for you.

Hi, Steve. This dates back to last year as we thought about our asset management strategies and what we were going to do with the business as we continued to see an unsupportive share price. We have always been a good seller. I think up to this point in time, we have sold almost 20 thousand homes back into the marketplace in the history of our business.

We know how to do it if the market is there—that is a really important point. As you look at what we sold in the quarter, I would bet close to 100% of those went to homeowners generally. There is also a mortgage market factor here that allows us to think about pricing. Our assets are primarily infill assets in highly desirable locations, so there is a bid there.

As we have gone to market to sell these homes, Scott and the team are looking for ways to be good capital allocators at the end of the day. We recognize the spread that is there. We are going to continue to use it as a measured lever like we have in the past, albeit it is a far more attractive cycle when you are buying shares at the prices that we were buying them back at. But it is a balanced approach.

We will look for opportunities to continue to recycle capital accretively. We do not want to necessarily signal one way or the other. We are going to continue to watch it through Q2 and then put that capital into whichever lever makes the most sense at the time—could be buybacks, could be other opportunities. I will hand it over to John to talk a little bit about tax.

Steve, if I am understanding your question correctly, you are asking whether tax is a governor. Clearly, we have to adhere to the tax rules and the REIT rules, and that does impose a degree of limitation on what we can sell. But generally speaking, we have to distribute all our taxable income to stockholders, and the homes that we are selling, as a general rule, have a lower tax basis, and so we are triggering a decent tax gain recognition. I think the real governor is the fact that we renew about 80% of our leases, and so the pool of homes available for sale at any given point in time is a pretty small subset of what we own.

The great news is, as Dallas mentioned, we have had a lot of experience selling homes into the end-user market. I think we are really quite good at that. To the extent that market conditions allow us to, we will continue to lean in. I think that is evidenced by the fact that we are ahead of where we expected to be from a disposition perspective, and that has allowed us to be as aggressive as we were with share repurchases.

Next question.

The next question comes from the line of John Pawlowski with Green Street. Your line is open.

Thanks. A follow-up on the dispositions in recent months. We can see which markets you are selling out of, but within a given market, have the dispositions been tilted towards what you consider lower cap rate assets, or more tilted towards higher cap rate assets that might have higher CapEx and/or lower forward growth?

When you look at where we have been disposing assets in the market, we have a list of homes that we have pre-identified for sale, and it is frankly a combination of factors. There are a lot of different things we look at. Some of the homes are in submarkets where we do not want to have a long-term presence. Some are high CapEx homes.

When you look at the way we look at the disposition cap rates, it has been roughly in the low-4% range if you annualize the income in place on those homes. You can see that year-to-date it has been about, call it, 40%-ish in Florida and 25% in California. But it really depends on which homes become vacant. We already know ahead of time which homes we have identified for sale, but we are dependent upon when those homes become vacant.

Generally speaking, we are selling the lower-quality homes—we are not selling the highest-quality homes in our portfolio. From an asset management and capital allocation standpoint, we have pre-identified those homes that are not long-term holds for us, in the bottom percentage of the portfolio, and we are going to continue to target those as they become vacant and as we see opportunities to sell.

Next question comes from the line of Juan Sanabria with BMO. Your line is open.

Hey, this is Robin Handelin sitting in for Juan. I was curious about how market concessions trended on new leases in the first quarter and April, and how you expect concessions to trend for the remainder of the leasing season?

Hi, Robin. Appreciate your question on concessions. As we shared at the Citi conference, we actually have no same store concessions in place today. We generally do not use concessions during peak season, and that is something we tend to use late in the year.

It is a tool in the toolbox. I will add that we do offer concessions on our build-to-rent communities during lease-up, and that is a pretty standard tool that developers use, especially in light of the fact that you are moving people into a construction zone as you are building the product. It is pretty standard to offer a concession on those. But again, that is not on our same store portfolio, and we do not feel the need to use concessions right now.

We are liking what we are seeing in terms of the fundamentals of this peak leasing season.

Next question comes from the line of Brad Heffern with RBC Capital Markets. Your line is open.

Thanks for taking my question. On guidance, I know you do not normally change it at first quarter earnings, but you also do not normally have this very large repurchase number, and that is obviously a known quantity at this point. Should we view this guidance as not incorporating the benefit from the repurchases, or is there some sort of offset that is also being incorporated?

Thanks, Brad. We did anticipate leaning in and being aggressive on share repurchase when we put our budget together for the year. We did get through it a little bit faster than we anticipated, but relative to guidance, I would say that there is not a hugely material benefit from that. That factors into our thinking, as does the fact that there is still a lot of year ahead of us.

The last couple of years there have been some patterns of behavior in the operating environment that have changed, and we want to be cognizant that it is still early in the year. We are really pleased with where we are. Big picture, we are right where we expected to be. We are ahead of where we expected to be on dispositions, but in terms of operating performance—revenue growth, expense growth, NOI growth—we are tracking very closely to our internal numbers.

We are going to watch and wait and see. We feel good about where we are. As Tim said, we are cautiously optimistic, but we are not seeing anything that would cause us to revise at this point.

Next question comes from the line of Michael Goldsmith with UBS. Your line is open.

Hi. Thanks. This is Amy. I am with Michael. I am curious—have you seen any change in demand for your third-party management platform or for development funding opportunities, given some of the uncertainty for SFRs within the Road to Housing Act?

Good question. Generally speaking, we get inquiries about opportunities to manage. Like we have said in the past, we are highly selective about when, how, and who in terms of how we want to operate, because we really just want to run our operating playbook. That said, there will be some noise that comes out of some of the legislative discussion that has been going on, and it certainly could create some opportunities.

I think it is a bit too early to tell or try to handicap that opportunity set. I would just say that the team here, both with our own portfolio metrics and from what our customers see, is focused on really consistent operations at the end of the day, and I think that has lent itself to Scott and the group being able to pursue or look at some other opportunities.

Next question comes from the line of an Analyst with Citi. Your line is open.

Hey, maybe I missed this in the prior answers, but now that your occupancy is at a very strong level above 97%, are you starting to get more aggressive on new leases, or given your experience with the last couple of years, are you trying to keep it protected going into the third quarter? Does the higher occupancy change your strategy on pricing?

Great question. While occupancy—our April number—was 97.1%, that is something that we do not know exactly where it will go. We anticipate, like I mentioned earlier, that occupancy will trend upwards as we head through peak season into late Q2, then tend to come down following move-in/move-out season. We price based on what the market bears.

We are constantly looking at supply and demand. We are cautiously optimistic that we will continue to show good numbers on the rent growth side, both on new and renewal, but it is a bit too early to predict that number at this point.

Next question comes from the line of Richard Hightower with Barclays. Your line is open.

Good morning. Thanks for taking the question. Last quarter you mentioned, directed to Dallas, your conversations with policymakers. You expressed some optimism, and since then, news flow has generally been better, not worse, for the single-family industry.

Can you update us on the tone and tenor and maybe some substance from those conversations? Do people seem to get some of the problematic elements of the legislation as it has been publicized?

Happy to provide some color. It has been a very active quarter in terms of that work, and we have been on the front lines with some of our peers, spending a lot of time on the Hill. As I shared in my opening remarks, there are two or three things that have come out of this process thus far. First, I think policymakers and the media are much better educated as to what the industry does now versus some of the taboo that has been written about the industry for the last ten years.

I view that as a net positive. I think the coverage has been fair. People are pointing out the fact that Invitation Homes Inc. and some of our peers are adding a lot of new supply and creating services that people want. Second, I have been impressed by the amount of collaborative conversation we have had on both sides of the aisle in Washington, D.C., and we have had really good conversations with the administration, Treasury, and elected officials who are trying to solve some of these housing supply issues.

I truly believe it is done in earnest. People are trying to address the fact that we know we need more housing supply. The conversations are dynamic. People understand you want to create regulatory frameworks that provide clarity to capital.

Over the last 90 days, that has been a little murky and created some noise, and I think everybody appreciates that we do not want to do things that stunt housing supply generally. It sounds like some of these provisions, in their current drafts, are being reviewed and thought through to see if there can be effective changes or revisions to land in a safer place for capital, for our residents, and for the opportunities to provide these services. Lastly, people who rent are voters and residents, and they matter. That message has resonated well on the Hill.

We have 47 million households in this country that lease something, and there should be rights associated with those households as well. It is not a simple solution. We have tried to stay as collaborative as we can with everyone through this process. We want to be viewed as a productive partner in housing.

While legislation is never perfect, the goal is that over time this lands in the right place so everyone—residents, capital, and most importantly the housing market—has clarity and can continue to evolve and create new supply.

Next question comes from the line of Adam Kramer with Morgan Stanley. Your line is open.

Thanks for the time, and Dallas, really appreciate the update on the legislation. Maybe piggybacking off that, as you think about the business—specifically with ResiBuilt—how are you thinking about the range of outcomes in terms of policy and what that means for the different parts of the business, both from an internal growth and then from an external growth and rent-to-build perspective?

A couple of things. There is a golf analogy—there is a lot of grass between here and the hole to know where this finally lands. We are glass-half-full guys, and we are always trying to think about ways that we can work with what we have. Even with the bill in its current form, I think Scott and I, and John as well, are comfortable that there are a lot of ways to still bring new housing supply to the market.

It is not perfect, and we hope it gets fixed, but we think we can operate within the framework. As it relates to ResiBuilt—set the bill aside—our goal has been to get smarter and smarter as homebuilders in all of the strategic partnerships that we have and will continue to maintain, and at some point be able to control a little bit of our own destiny. That can come in a variety of shapes and sizes. Scott is looking at a lot of very interesting opportunities in real time.

It still ties back to our earlier comments around how we allocate capital in this environment. Development opportunities may not be highest and best use right now all the time. There are certainly some things that are starting to look more and more palpable as we look for some of these opportunities—and then how you design these communities, the standards, whether they are townhomes, and how you make sure you operate within whatever potential framework is or is not there in the future. I will hand it over to Scott to talk about what we are seeing and our early learnings on the ResiBuilt transaction.

Thanks, Dallas. It is now three months since we closed the acquisition of ResiBuilt. We are really pleased with the integration of their platform into Invitation Homes Inc. ResiBuilt is executing on their existing midstream customer contracts we took over as part of the acquisition.

We continue to build a backlog of partners for future fee-build opportunities. Obviously, some projects have been put on hold until we have further clarity with the legislation in Washington, but we are evaluating new opportunities and taking our time. As we originally said when we made the acquisition, we look to grow the fee-build side of the business, we look to grow the side of the business that will build for our joint venture partners, and eventually for ourselves. Nothing has changed from that game plan.

Next question comes from the line of an Analyst with Raymond James.

Thanks, everybody. My question has already been asked and answered. I appreciate that.

Next question comes from the line of Jesse Lederman with Zelman & Associates. Your line is open.

Thanks for taking the question. Another one for Scott. It looks like the company pared back some of its forward purchase agreements during the quarter with 76 net cancellations. Can you provide some color on the thought process behind that?

It seems like overall industry fundamentals are improving relative to where you were three months ago when you had about 200 net additions. Is it fair to assume the pullback was driven by incremental legislative uncertainty, or something else?

Thanks, Jesse. We have been following the signals we have seen in the capital markets in terms of our capital allocation strategy. As a reminder, we disclosed in the quarter that our current forward backlog is $556 million, which is around [inaudible]. This is down from almost 2.7 thousand homes we had in the backlog at our peak in Q2 2024. These homes in the backlog are really the tail end of forward commitments that we had with homebuilders where we started taking deliveries in 2025, and we are getting final deliveries over the next few quarters.

We have really dialed back our acquisitions and forward commitments, and we have dialed up our dispositions. We have recognized the signals we have received in terms of our cost of capital and how we are allocating our capital. A lot of this is driven by cost of capital and where we go from here. We are taking a cautious view of the market toward acquisitions at this point, and we will see where we go from here.

Next question comes from the line of Jade Rahmani with KBW. Your line is open.

Hi. Thanks. This is Jason Sabshon on for Jade. In the higher-for-longer rate environment and with the regulatory uncertainty, have you seen any movement in pricing from sellers? Is that something that you would lean into, or would you more just wait and see on the regulation front?

We have actually seen overall supply in the resale market be pretty steady. We have not seen much movement in cap rates. You have certainly seen some opportunities on finished spec inventory where there might be some interesting scattered approaches, but with the murky outlook for the last 90 days, capital is being very cautious about one-off purchasing or anything like that. The end-user market is very mortgage-market driven, especially in suburbs or tertiary outliers.

We see less of that with our infill portfolio, as we talked about in our disposition program earlier. We have not seen a whole lot that seems all that compelling.

Next question comes from the line of John Pawlowski with Green Street. Your line is open.

Thanks for taking the question on expenses. You mentioned insurance costs are trending favorably. Are there any other line items surprising positively or negatively as 2026 unfolds?

Hey, John. Thanks for the question. I would say not yet. On insurance, when we introduced guidance, we were on the cusp of completing our renewal.

At that time, our expectation was that the property renewal would be slightly favorable, but that it would be a materially harder renewal for general liability, workers’ comp, auto, etc. I would say that outlook was directionally correct, but ultimately we were able to do slightly better on those nonproperty lines of coverage. The difference between the original midpoint we articulated and the updated midpoint in last night’s release is a little less than $2 million—ultimately not a hugely material change. As I noted earlier, at this stage of the year things are tracking very closely to how we expected the early part of the year to unfold, but I would stress that it is still early, and we are going to continue to watch expenses like a hawk.

And our last question comes from the line of Michael Goldsmith with UBS. Your line is open.

Hi, it is Amy. Thanks for the follow-up. With turnover ticking slightly higher over the last couple of quarters, are you seeing any changes in reason for move-out that could be driving this, or is it just normalization off of the very low COVID-era turnover levels?

We have been seeing for the last year about 16% to 17% of our move-outs be part of a home purchase opportunity. That has been very consistent and a little bit low for the last four quarters. We also see about 25% of our move-outs tied to some sort of a transition in life, like a move for a new job or schools, etc. Those numbers have been incredibly consistent for the last four quarters.

No, I think you covered it.

This completes our question and answer session. I would now like to turn the conference back over to Dallas Tanner for any closing remarks.

We want to thank everyone for their support. Thanks for being on the call today. We look forward to seeing people at upcoming conferences. Thank you.

Ladies and gentlemen, that concludes today’s call. Thank you for joining in. You may now disconnect.