Single-Family Build-to-Rent Market Holds Steady Despite Slowing Demand

The single-family build-to-rent market has seen substantial growth over the last few years, but that growth remained muted in September amid ongoing challenges in the broader housing market. According to online real estate marketplace Point2Homes, nationwide occupancy in the SFB2R market remained steady at 95.1%, unchanged from the prior year. At the same time, however, rental rates in the SFB2R market declined alongside the rest of the rental market. In Septemeber, SFB2R rental rates saw the sharpest monthly decline in approximately one decade, dropping by $15 to an average of $2,194. This is likely due to slowing demand caused by more inventory entering the marketplace. 

However, not all markets saw rental rates drop. The Minneapolis metro, for instance, saw a 5.7% increase in rental rates. Similarly, Kansas City and Chicago saw rents increase by a respective 5.2% and 4.7%.

At the other end of the rent rates spectrum, declines were most pronounced in Tampa–St. Petersburg (-3.5%), Austin (-2.8%) and Denver (-2.4%). The pullback in these markets (much like in others, such as Jacksonville or Raleigh-Durham) aligns with recent deliveries and moderate leasing activity, which affected advertised rates in areas that had been growing quickly in recent years.