Company: BHM
Filing Date: 2025-07-08
Form Type: DRS
Source: 0001104659-25-066400
Chunk: 159

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-07-08
Form: DRS
Chunk 159
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 · | Renting currently represents a significant cost saving to homeownership, and the recent increases in both housing prices and mortgage rates have exacerbated the difference. The median cost to rent versus owning a home is near the widest gap on record, reaching approximately $1,300 per month, with only 27% of United States households able to qualify for a standard Freddie Mac loan on a median priced home. (Source: Marcus & Millichap, 2025 Multifamily Investment Outlook.) |
| · | Favorable demographic trends should drive demand for residential rental product. The aging of the millennial cohort into their prime household formation years and desire for more space combined with the financial constraints of this cohort should spur demand for moderately priced residential rental product.                                                                                                                                                                       |
| · | Low housing supply has contributed to extraordinary housing price increases. Low supply, coupled with pandemic growth, triggered record high year-over-year home price increases.                                                                                                                                                                                                                                                                                                          |
| · | Robust rental market fundamentals provide an exceptionally strong backdrop for the entire rental sector. Low vacancy rates and strong long term historical rent increases signal a long term healthy sector with significant opportunity.                                                                                                                                                                                                                                                  |
| · | Residential rental production has been below trend for many years, creating both low rental vacancy rates and older dated product for much of the nation’s housing stock. According to Marcus & Millichap, this trend is expected to continue with multifamily construction expected to decrease 30% in 2025 compared to 2022 construction starts.                                                                                                                                         |
| · | Robust rental market fundamentals provide an exceptionally strong backdrop for the entire rental sector. Low vacancy rates and strong long term historical rent increases signal a long-term healthy sector with significant opportunity.                                                                                                                                                                                                                                                  |

Homeownership Unaffordability Driving Residential Rental Demand

Apartment and single-family
rental tenants will be forced to rent longer due to the affordability constraints associated with home ownership. As the chart below illustrates,
for most of the past 20 years, with the limited exception of the years immediately following the Great Recession, renting was significantly
more cost-effective than owning. According to John Burns Real Estate Consulting, it is 44% more expensive to own a home than rent, as
of October 2024. This trend has been persistent, with homeownership 45% more expensive on average since 2022.

<div align='center'>National Cost of Purchasing vs. Renting Single-Family Starter Home %

Monthly mortgage payment + maintenance for single-family
starter home vs. monthly rent

Source: John