The single-family rental market is poised for continued growth in 2021, according to a new report from Mizuho Securities. The firm kicked off the year overweight on the sector, and say SFR's strong fourth quarter earnings and guidance outlooks for 2021 affirm that position.

The firm remains bullish on the sector, noting that SFR REITs American Homes 4 Rent and Invitation Homes both imply accelerating internal growth and strong upside pricing potential. Mizuho raised its earnings estimates for both firms, noting that the pace of new and renewal leases accelerated in the fourth quarter of last year while rent collections stabilized, albeit with some bad-debt drag.

It also took note of strong external growth for both REITs, noting that AMH acquired $160 million during the fourth quarter while selling $45 million with undisclosed yields. The firm also delivered around 1,600 homes during 2020 at an average monthly rent of $1,900. AMH expects to acquire $800 million in homes in 2021 with another $300 million via joint ventures, and expects to invest $300 million into wholly-owned land and development. Its guidance shows it expects to deliver 2,100 homes this year.