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Build-to-rent communities are currently on the rise, but some experts think the trend will stabilize in the near future.
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The build-to-rent (B2R) industry has been one of the fastest-growing segments in single-family home construction for several years. With elevated mortgage rates and limited housing supply, the average new buyer needs a six-figure income to afford a median-priced home in most markets, according to survey data from home improvement website And that’s helping to spur B2R construction. 

The report shows there will be 75,000 B2R starts in 2023, representing a 102.5% increase from 2019 but a 5% drop from 2022. This leaves the 2024 outlook uncertain, with 54% of experts saying demand will reach record highs, while 46% believe activity in the sector will decline.

According to Robert Dietz, NAHB's Senior Vice President and Chief Economist, "Higher interest rates have reduced some investor demand for single-family build-for-rent homes." 

But [CEO of ARK Homes For Rent John] Isakson says the near-even split could indicate that builders have different opinions on what interest rates will do. "If the interest rates go down," he says, "more people will buy homes, which will cause the BTR industry to slow down. But if the interest rates remain stable or increase, the BTR industry will continue to grow."

Whatever happens to interest rates and the availability of investor funds, experts do agree that the BTR market will evolve in various ways over the next few years. 

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