AMH Slows Deliveries Amid Supply Pressures, Boosts Buybacks

Date of Call: Feb 20, 2026

Financials Results

• EPS: $0.33 per diluted share, 4.1% year-over-year growth

Guidance:

• Core FFO per share unit expected to be $1.89 to $1.95, representing 2.7% year-over-year growth at the midpoint.
• Core revenue growth expected to be 2.25%, reflecting 2.5% average monthly rent growth and a 25 bps occupancy headwind.
• Same-home core NOI growth expected to be 2% at the midpoint.
• Expect to deliver around 1,900 new homes through the AMH Development program.
• Full year outlook contemplates $115 million of share repurchases already executed; additional repurchases will be patient due to capital market uncertainty.

Business Commentary:

Core FFO and Revenue Growth:

• American Homes 4 Rent reported core FFO per share of $1.87 for 2025, representing a 5.4% year-over-year growth.
• The growth was driven by consistent operational results, effective navigation of market challenges, and strategic focus on maximizing value across all business areas.

Development and Disposition Strategy:

• The company delivered over 2,300 homes in 2025, with plans to deliver around 1,900 newly constructed homes in 2026.
• This strategy is supported by selling properties to individual homeowners, with 1,827 properties sold for total net proceeds of approximately $570 million, providing capital for new developments.

Occupancy and Rental Rate Trends:

• In January 2026, the company reported new, renewal, and blended spreads of -1%, 3.5%, and 2.4%, respectively, with same-home average occupied days at 95%.
• The trends reflect seasonal demand moderation and elevated supply pressures, prompting a strategic focus on occupancy and a flatter seasonal curve for rent growth in 2026.

Balance Sheet and Share Repurchase:

• At year-end, the company's net debt to adjusted EBITDA was 5.2x, with a $1.25 billion revolving credit facility balance of $360 million.
• American Homes 4 Rent repurchased 8.4 million common shares at an average price of $31.65 per share, representing approximately 2% of total share units outstanding, as part of a strategic capital deployment plan.

Sentiment Analysis:

Overall Tone: Neutral

• Management acknowledges a 'challenging environment' with 'seasonal demand moderation and stubborn supply' impacting rates and occupancy. However, they express confidence in their strategy, citing 'solid execution' and leading the residential sector in FFO growth, while emphasizing a commitment to creating value through development and disciplined capital deployment.

Q&A:

• Question from Eric Wolfe (Citigroup Inc., Research Division): Can you just talk about why you're expecting a flatter occupancy and rent growth curve than you normally expect? And I guess, specifically what that means for your blended rate growth expectation? And then I guess, lastly, on the occupancy, you said that you're expecting it to be flatter this year as well. But if I look at your fourth quarter, you're down like 30 basis points year-over-year. And I think that's what you're expecting through the full year of 2026. So I guess why -- I guess it seems to me like you're expecting something more sort of seasonal like you saw in 2025. So just help us work through both those elements.
  Response: Occupancy is expected to be built through leasing season and held more into the back half of the year due to favorable expiration curves, with new lease rate growth remaining flat and renewals around +/-3%, leading to a low-2% blended spread expectation.

• Question from James Feldman (Wells Fargo Securities, LLC, Research Division): I appreciate the thoughts on the seasonal curve. Maybe just as you thought about giving your guidance for the year, I mean, there's a lot of moving pieces out there on the political front, on the demand side, on the supply side, where would you say there's the most variability to your numbers? And maybe talk us through the high end, the low end of the range and what gets you to either end across the key line items.
  Response: The most variability is due to elevated supply levels in some markets, which creates more choice for residents and extends lease-up times, though demand for AMH products remains strong. The guidance reflects a prudent outlook given this supply-demand dynamic.

• Question from Steve Sakwa (Evercore ISI Institutional Equities, Research Division): Just wanted to focus a little bit on the development pipeline. I mean it sounds like you're slowing deliveries a little bit and being a little bit more cautious, I guess, certainly given the capital markets environment. But like where are you seeing development yields for the product you're starting today based on today's rents and today's cost? What can you get? And I guess, how do you weigh deploying capital there against the buybacks? I know you're being probably a little bit cautious given the political environment, but sort of how do you weigh those two things today?
  Response: Development yields are expected to be similar to 2025's 5.3%. Capital deployment is sized appropriately, with on-balance-sheet development funded by disposition proceeds, freeing up capacity for buybacks, but the timing of additional repurchases will be patient due to market uncertainty.

• Question from Haendel St. Juste (Mizuho Securities USA LLC, Research Division): Maybe some color on OpEx. You outlined expectation for tax, I think going to be up 3%, 4 to 5 -- sort of the 4% to 5% long-term average we've seen. Is there anything unique worth highlighting? Do you think this is a sustainable level near term? And maybe some color on turnover, what you're expecting in your recent insurance renewals.
  Response: Property tax growth is expected to be moderate at ~3%, below the long-term 4-5% average. Insurance costs are expected to decrease double-digits due to successful renewal campaigns, and controllable expenses are expected to grow around 3%, reflecting continued tight controls.

• Question from Jeffrey Spector (BofA Securities, Research Division): Great. If you could talk a little bit more about the supply pressure you saw in '25, what surprised you, would be a little bit more specific in terms of markets. And how that may impact your strategy going forward on markets? Again, Midwest continues to outperform. Do you want to try to lean in more there? given the pressure you're seeing, let's say, in the Sunbelt and your thoughts on that supply pressure in '26.
  Response: Supply pressure in markets like San Antonio (multifamily), Phoenix (build-to-rent), and Las Vegas (for-sale conversions) impacted performance. Midwest fundamentals remain strong and supply-constrained. Strategy involves careful market evaluation, with a focus on long-term prospects in core markets like the Carolinas, Seattle, and Columbus.

• Question from David Segall (Green Street): Recognizing that you're going to take a more patient approach to additional buybacks this year. Would you need additional sales activity dispositions in order to fund any additional buybacks? And I recall that you had 20,000 homes that were released from collateral from being securitized, it's collateral last year. Would we see that as a source of additional funding this year?
  Response: Incremental buybacks can be funded from existing balance sheet capacity (~$200M) or future disposition proceeds, but the pace is governed by the need to vacate homes for sale, as leases must roll naturally.

• Question from Buck Horne (Raymond James & Associates, Inc., Research Division): I was curious if you could comment a little bit about the news from the White House last night about potentially capping the single-family or the investor band at about 100 homes per organization. So if that's a much lower cap than previously contemplated, just going through a thought exercise of how do you think that plays out in the industry? Does that potentially force a lot of subscale operators to either pull rental inventory out of the market or sell inventory quickly. What do you think those other smaller tier operators are going to do if that type of cap is in place?
  Response: Engagement with policymakers continues; the final rules are pending. AMH emphasizes its role as part of the housing solution. The impact on smaller operators is unclear, but industry messaging focuses on the need for single-family rentals in the ecosystem.

• Question from Brad Heffern (RBC Capital Markets, Research Division): Yes. Obviously, I appreciate all the color on the supply impacts. When do you think we're going to be in a more normal environment just from a supply-demand balance standpoint? .
  Response: The timing to return to normal supply-demand balance depends on the industry's ability to consume existing inventory, which is monitored closely, but no specific timeline is provided.

• Question from Jesse Lederman (Zelman & Associates LLC): When you spoke in late October, you noted your internal dashboards were indicating some inflection point in seasonal leasing activity. But it looks like in November versus December, occupancy was lower sequentially and that's continued here in January. So what changed over the subsequent few months relative to your expectations in October? And if you could just talk through the renewal rent growth falling roughly that 70 basis points [ sequentially ] into January. That would be great as well.
  Response: Occupancy expectations were adjusted due to seasonal moderation in Q4; pricing strategy was modified, and new lease growth turned negative. Renewal rates were set with slight moderation to support retention, with full-year renewals expected around 3%.

• Question from Michael Goldsmith (UBS Investment Bank, Research Division): Can you talk a little bit about pricing trends at the build to rent versus the scatter site product? And are you offering concessions at either or both of those segments in your portfolio?
  Response: Strong demand for communities with no concessions needed; pricing power is supported by superior product and location, with concessions minimal at new developments and scattered sites.

• Question from Jason Sabshon (Keefe, Bruyette, & Woods, Inc., Research Division): This is Jason Sabshon on for Jade. So homebuilders have leaned in or rate buydowns and incentives lately. Can you comment on the supply-demand balance in key Sunbelt markets and whether you're seeing that aggressiveness from builders drive any increase in move-outs to buy.
  Response: Move-outs to buy remain steady in the high 20s-30% range; some builder incentives in specific markets exist but are anecdotal and not significantly impacting overall trends.

• Question from Unknown Analyst (Barclays): Looking at the development pipeline, you have some lots in some markets outside of the Sunbelt, like the Midwest and in the West Coast -- just wondering where the delivery this year located and where you'd have the preference for starting new developments. .
  Response: Development focus is on high-demand markets like Columbus, Carolinas, and Seattle; lot pipelines in Arizona and Las Vegas may face short-term pressures.

• Question from Eric Wolfe (Citigroup Inc., Research Division): Thanks for taking the follow-up. Looking at the changes in your same-store pool, your third quarter occupancy was 95%, like as reported last quarter, and now it's 96.4%. So there's a similar like a 50 basis point change based on what you sold. I guess what is the reason for that? I mean is it -- are you selling more vacant homes than normal? Why was there such a sort of jump in the occupancy based on the new same-store pool? Because obviously, it creates a little bit of a more difficult comp for you.
  Response: The occupancy increase is due to smart asset management, selling underperforming properties, which lifts the average of the remaining same-store pool.

• Question from Eric Wolfe (Citigroup Inc., Research Division): Okay. And then last question. You normally have a pretty good idea, not perfect, but good idea of sort of what forward occupancy looks like and I know it can miss based on various factors. But I guess, as you look at things 30, 60 days out based on your revenue management system, are you seeing that typical lift in occupancy that you normally see at this time of year, especially since you've throttled baked down a bit. Just curious if you can give us a perspective on sort of where you expect to go over the next couple of months?
  Response: Leasing season started a bit slower, but normal upward trends in activity are being seen; occupancy is expected to build into the 96s during peak season and hold into the back half of the year.

• Question from Austin Wurschmidt (KeyBanc Capital Markets Inc., Research Division): Great. Beyond the supply challenge markets that you've discussed, is the moderation you're assuming in guidance around lease rate growth or that flatter seasonal curve that you described. Is it broad-based? Are you seeing it more pronounced than either the Sunbelt or Midwest markets? And then on top of that, just curious how much that's playing into your development decisions.
  Response: Supply pressure is broad-based but market-specific; development sizing is driven by relative returns (yields) compared to capital market conditions and cost of capital, with construction costs remaining controlled.

• Question from Buck Horne (Raymond James & Associates, Inc., Research Division): Thanks for the followup. Appreciate the time. Wanted to talk about the dispositions that were executed in not only the fourth quarter just year-to-date? Just thinking through the -- what you've been able to sell with the, it looks like net proceeds were just a shade under $300,000 per house. Most of your markets median resale prices are probably closer to $400,000, how would you characterize kind of the tier of the dispositions that you're selling?
  Response: Disposed properties are typically noncore, lower-value assets, often from previously securitized portfolios, with sale prices reflecting their different growth profiles compared to newer, higher-quality development homes.

• Question from Brad Heffern (RBC Capital Markets, Research Division): Thanks for taking the followup. Chris, just given all the political noise, do you have an elevated level of advocacy costs or anything like that, that are in G&A and that are having an impact on the guide? .
  Response: Government affairs costs are a structural part of the P&L, running under $0.01 per share annually; additional costs related to current advocacy efforts are not separately quantified in guidance but will be called out if material.

• Question from Steve Sakwa (Evercore ISI Institutional Equities, Research Division): I just wanted to follow up on the dispositions. What constraints, I guess, outside of tax issues that you have around dispositions, meaning you want certain size of homes or certain scale in the market. So to what extent are your dispositions limited by you wanting to have a good footprint in each market as you think about kind of the disconnect between kind of the sales values and kind of where the stocks trading.
  Response: Disposition volume is naturally limited by the need to vacate homes as leases roll; strategic pruning of noncore assets allows reinvestment in better-growth areas while maintaining efficient operating platforms at various scales.

Contradiction Point 1

Occupancy Build-Up and Leasing Season Timing

Expectations for occupancy trajectory shift from a strong year-end build to a delayed, flatter curve.

What is Eric Wolfe's role at Citigroup Inc.? - Eric Wolfe (Citigroup Inc.)

2025Q4: The start of the leasing season is slightly delayed. Despite expectations, occupancy build-up into year-end 2025 did not materialize as planned, leaving the company about 200-300 houses behind. - [Lincoln Palmer](COO)

Why do you expect slower occupancy and rent growth rates compared to typical trends? - Juan Sanabria (BMO Capital Markets)

2025Q3: The lease expiration management program... is playing out extremely well as expected. This strategy will peak in benefits in the fourth quarter, resulting in the lowest number of move-outs in November. This should allow the company to build occupancy heading into year-end and position the portfolio for strength in 2026. - [Lincoln Palmer](COO)

Contradiction Point 2

Supply Pressure and Market Outlook

Assessment shifts from acknowledging localized supply impacts to describing a broad, elevated supply challenge.

Can you provide an update on the company's current financial outlook? - James Feldman (Wells Fargo Securities)

2025Q4: A key challenge is that supply across all residential housing types remains stubbornly elevated in many markets, especially multifamily, build-to-rent, and for-sale conversions. - [Bryan Smith](CEO)

Where is there the most variability in your financial numbers? - Adam Kramer (Morgan Stanley)

2025Q3: There is some impact from conversions of for-sale-to-rent inventory... However, many markets (e.g., Midwest, Salt Lake City, Seattle) are still performing extremely well. - [Lincoln Palmer](COO)

Contradiction Point 3

Strategic Focus and Market Commitment

Contradiction on the company's strategic commitment to Sunbelt markets versus a new focus on the Midwest.

What is the main question from the unknown analyst at Barclays? - Unknown Analyst (Barclays)

2025Q4: Development focus is on Columbus, markets in the Carolinas, and Seattle, which are viewed as high-demand, long-term growth areas. - [Bryan Smith](CEO)

Where are this year's deliveries located outside the Sunbelt, and where would you prioritize starting new developments? - Steve Sakwa (Evercore ISI)

2025Q2: Our focus is on the Sunbelt... We are not seeing the kind of supply pressures in our core Sunbelt markets that are present in the broader multifamily market. - [Bryan Smith](CEO)

Contradiction Point 4

Development Yield Expectations

Contradiction on projected development yields between 2025 and 2026.

What are your thoughts on Steve Sakwa's (Evercore ISI) question? - Steve Sakwa (Evercore ISI)

2025Q4: Development yields for 2026 are expected to be similar to 2025, around 5.3%, driven by ongoing rent pressures across residential. - [Bryan Smith](CEO)

Given today's rents and costs, what development yields can you achieve for new projects? - Brad Heffern (RBC Capital Markets)

2025Q1: Using the same measuring stick, development land yields are in the 6%+ range, versus ~4% for builder acquisitions. - [Christopher Lau](CFO)

Contradiction Point 5

Strategic Growth Focus in Core Markets

Shift in emphasis regarding geographic focus for future growth.

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2025Q4: The company is committed to these long-term markets [Midwest, Carolinas, Seattle] but is watching all markets carefully. - [Lincoln Palmer](COO)

Could you discuss the supply pressures in 2025, specifically which markets surprised you, and how this may influence your market strategy moving forward? - James Feldman (Wells Fargo)

2025Q1: AMH is actively expanding its footprint there, including developing land in Columbus and adding property in Indianapolis... - [Bryan Smith](CEO)