Invitation Homes Plummets 5.6% as Trump's Housing Policy Sparks Sector-Wide Turmoil

Summary
• Invitation Homes (INVH) trades at $26.525, down 5.6% from its $28.10 previous close
• Intraday range spans $25.29 (52-week low) to $28.345
• Trump’s proposed ban on institutional home buying triggers sharp selloff in SFR REITs

Invitation Homes faces a historic intraday plunge amid political headwinds reshaping the single-family rental (SFR) sector. The stock’s 5.6% drop to $26.525—a 52-week low—reflects immediate fallout from Trump’s policy proposal to restrict large institutional investors from purchasing single-family homes. With AMH and NXDT also reeling, the REIT sector’s vulnerability to regulatory shifts is laid bare.

Trump's Housing Policy Sparks Regulatory Fears in SFR REITs
The sharp decline in Invitation Homes stems directly from former President Donald Trump’s proposal to ban institutional investors from purchasing single-family homes, a policy aimed at boosting housing affordability. This move threatens the core business model of SFR REITs like INVH, which owns 85,000 single-family homes. The regulatory uncertainty has triggered a sector-wide selloff, with American Homes 4 Rent (AMH) down 3.46% and NexPoint Diversified Real Estate Trust (NXDT) plunging 16%. The policy’s potential legal challenges and market volatility have amplified investor caution, accelerating the sell-off.

Equity REITs Sector Reels as AMH Trails Behind INVH
The Equity REITs sector, led by American Homes 4 Rent (AMH), mirrors INVH’s bearish trajectory but with less severity. While INVH’s 5.6% drop reflects heightened exposure to regulatory risks, AMH’s 3.46% decline suggests relative resilience. Both stocks, however, face shared headwinds from Trump’s housing policy, which targets institutional ownership—a core revenue driver for SFR REITs. The sector’s beta of 0.77 (lower than market volatility) offers limited protection, underscoring the fragility of REIT valuations amid policy-driven uncertainty.

Bearish Options and Key Technical Levels for INVH
• 200-day MA: $30.82 (well above current price)
• RSI: 65.31 (neutral to bearish)
• Bollinger Bands: $26.05 (lower band) near critical support
• MACD: 0.055 (bullish divergence but weak)

INVH’s technicals paint a mixed picture: short-term bullish candlestick patterns clash with a long-term bearish trend. The stock is testing its 52-week low of $25.29, with the 200-day MA at $30.82 acting as a distant resistance. Traders should monitor the $27.17 (middle Bollinger Band) and $26.05 (lower band) levels for potential reversals. The options chain offers bearish opportunities, with high-leverage puts aligning with the 5% downside scenario.

Top Option 1: INVH20260116P25
• Code: INVH20260116P25
• Type: Put
• Strike: $25
• Expiry: 2026-01-16
• IV: 48.04% (moderate)
• Leverage: 116.20%
• Delta: -0.189 (moderate sensitivity)
• Theta: -0.027 (high time decay)
• Gamma: 0.127 (strong price sensitivity)
• Turnover: $283,516 (high liquidity)

This put option offers a 116% leverage ratio and high gamma, making it ideal for a 5% downside scenario. A 5% drop to $25.20 would yield a $0.20 payoff (K - ST = $25 - $25.20 = $0.20).

Top Option 2: INVH20260220P27.5
• Code: INVH20260220P27.5
• Type: Put
• Strike: $27.5
• Expiry: 2026-02-20
• IV: 36.61% (reasonable)
• Leverage: 14.85%
• Delta: -0.5596 (high sensitivity)
• Theta: -0.013 (moderate time decay)
• Gamma: 0.114 (strong price sensitivity)
• Turnover: $74,976 (high liquidity)

This put’s high delta and gamma position it to capitalize on a prolonged bearish move. A 5% drop to $25.20 would yield a $2.30 payoff (K - ST = $27.5 - $25.20 = $2.30).

Aggressive bears may consider INVH20260116P25 into a breakdown below $26.05.

Backtest Invitation Homes Stock Performance
Invitation Homes (INVH) experienced a significant intraday plunge of approximately -6% on December 12, 2022. Following this event, the stock's performance has shown a recovery trend. As of the latest data, INVH has rebounded by approximately 20% from the December 12 low point. This recovery is notable, considering the broader market conditions and the challenges faced by the single-family rental sector. The performance of INVH after the plunge indicates a resilience in the company's stock, which may be attributed to various factors including its strategic positioning, financial performance, and market perception.

Regulatory Uncertainty Dominates as INVH Tests 52-Week Low
The sustainability of INVH’s decline hinges on regulatory outcomes and sector resilience. Key levels to watch include $25.29 (52-week low) and $26.05 (Bollinger lower band). AMH’s -3.46% move signals sector-wide vulnerability, but INVH’s deeper drop reflects its larger exposure to institutional ownership. Investors should prioritize short-term bearish options with high gamma and liquidity while monitoring Trump’s policy developments. A breakdown below $25.29 would validate a long-term bear case, while a rebound above $27.17 could signal a temporary oversold bounce.