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To Buy or Not to Buy? Recession Fears Push Sellers and Builders Into Rental Market

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Build to Rent

To Buy or Not to Buy? Recession Fears Push Sellers and Builders Into Rental Market

As homebuyer demand wavers amid record-high housing costs, sellers and builders are investing in a red-hot rental market

September 12, 2022
Pieces of paper cut into shapes of houses with rent or buy written with question mark
Image: Stock.adobe.com

As homebuyer demand continues to fall from record highs, sellers and home builders are shifting their focus to the rental market. In order to attract wary buyers in a cooling market, builders and sellers are lowering their prices and offering concessions, but many are instead finding more success by moving into the for-rent market, MarketWatch reports.

In states like California, home prices are beginning to fall in overheated markets, and rather than bargaining with budget-conscious buyers, sellers are finding strong demand among renters, while builders are working to boost supply on single-family homes for rent.

“There are a lot of builders that believe that the for-rent market can offer a hedge to a slowing housing market,” Ali Wolf, chief economist at Zonda, told MarketWatch. 

“There are builders that weren’t that active in the for-rent space a couple of years ago that are now working to build single-family homes for rent,” she added, “because they say we can offer the home, the location, the school district in some cases, all to a consumer without them having to worry about the down payment.” 

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