(Bloomberg) -- Last year’s pandemic-fueled rush to the suburbs was good for American Homes 4 Rent, which owns more than 53,000 rental houses.

The single-family landlord reported same-home occupancy of nearly 98% at the end of 2020, capitalizing on record demand to raise rents when one household moved out and another moved in. Rents grew 7.6% on new leases in the fourth quarter, according to a statement on Thursday.

Surging demand for houses to buy has made inventory scarce and pushed prices higher, making it harder for Americans to find affordable properties. That’s fueling demand for single-family rentals, which provide backyards and extra rooms without the cash needed for a down payment.

“Demand for single-family rentals is as strong as I’ve ever seen it, and the reality is that it keeps getting stronger and stronger,” David Singelyn, chief executive officer of American Homes, said in an interview. “What excites me more than what happened in 2020 is looking forward to 2021 and future years.”

The company is projecting that core funds from operations, a key metric for landlords, will increase 7.8% at the midpoint of its guidance this year. That number is likely to stand near the top of the industry once other publicly listed landlords report earnings, said Jeffrey Langbaum, an analyst at Bloomberg Intelligence.

The demand for single-family rentals is also coming from institutional investors. They showed new ardor for the asset in 2020 as the pandemic made traditional commercial real estate assets like offices and hotels less appealing.

American Homes has distinguished itself from rivals by focusing on developing communities of rental homes. Singelyn said the company spent 2020 buying land to fuel its development pipeline, ensuring that it can continue adding to its portfolio even as the influx of institutional investors increases competition for assets.

That should prove a boon for the company as long as the shift to the suburbs continues once the pandemic ends and the appeal of urban living returns with the reopening of office buildings and restaurants.

“The risk in my view is whether that demand wanes in a more normal economy, and whether they’re left with an oversupply situation,” Langbaum said.

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