Single-family built-for-rent construction is cooling as tighter financial conditions push investors out of the market, the National Association of Home Builders' Eye on Housing reports. The Census Bureau’s Quarterly Starts and Completions by Purpose and Design revealed approximately 14,000 single-family, built-for-rent (SFBFR) starts during the first quarter of 2023, down almost 7% from the first quarter of 2022.
Despite declines in new SFBFR starts, the SFBFR market should retain its elevated market share, particularly as a more affordable alternative to new-home purchases.
Additionally, demand by investors for single-family rental units, new and existing, has cooled in recent months as financial conditions have tightened. This will lower the share of homes sold to investors in the quarters ahead.
With the onset of the Great Recession and declines for the homeownership rate, the share of built-for-rent homes increased in the years after the recession. While the market share of SFBFR homes is small, it has clearly expanded.