Built-for-Rent Construction Posts Small Gains Despite Economic Challenges

The number of single-family homes built-for-rent posted a year-over-year increase for the first quarter of 2020, according to NAHB. In the first quarter of 2020, there were approximately 8,000 single family built-for-rent starts compared to 7,000 in the first quarter of 2019. The overall built-for-rent starts for the past four quarters are below prior estimations, but NAHB says that there are opportunities ahead for the built-for-rent market as some seek escape from dense neighborhoods but still must find rental housing.  

The number of single-family homes built-for-rent (SFBFR) posted a small year-over-year increase for the first quarter of 2020 despite otherwise challenging market conditions. The SFBFR market has received attention as a means to add single-family inventory amid concerns over housing affordability and downpayment requirements in the for-sale market, particularly during a period involving elevated unemployment and weak wage growth. Single-family built-for-rent construction does differ in structure characteristics compared other newly-built single-family homes.

According to NAHB’s analysis of data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, there were approximately 8,000 single-family built-for-rent starts during the first three months of 2020. This was a slight gain over the first quarter 2019 total of 7,000. Over the last four quarters, 40,000 such homes began construction, which is lower than the 44,000 estimated SFBFR starts for the four prior quarters.

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